This is part of our Pay Debt Quickly series sponsored by
PDQ Pay Debt Quickly kit.

Question: My boyfriend of 5years and I are considering getting married. His only concern is that he has $3,000- $4,000 in bad debt, and would like to pay it off before we get married. Is this wise, or should we get married, and reduce our monthly payments in insurance, rent, electricity, etc., to make it easier to pay his off? Beth

Answer: Hi Beth, good questions! Congratulations for finding a partner who wants to be a good money manager.

How old is the debt?

When a creditor does not receive payment on a debt they will eventually “write it off”. This is one of their costs of doing business. If the debt is approaching 7 years, it will come off your boyfriend’s credit report at the 7 year point.

If he does start paying it off now and is late again that will show up on his credit report.

If, however, he does want to pay it off and he actually has some money set aside, he should consider contacting the creditor to see if they will take less than the balance. It would be a win-win for both him and the creditor, because after a period of time, they don’t expect to ever see any of it so they are often glad to get anything at all. They usually want whatever they’ve agreed to right away.

He should also ask them to report it as paid in full and closed at consumer’s request.

There are tax consequences, however, because the portion that doesn’t get paid is considered taxable income. You should consult your tax preparer about that and what that would mean to your tax situation.

I would explore these options first. Debt free is a lovely way to start a marriage!

Best wishes to both of you.

Warmly, Cindy