Relationships Talk

He has $2,500 in savings; she has none. That’s not so bad, I thought. At least they are talking in terms of cash.

And then the bride dropped the bomb.

Because she’s in her mid-30s and she has waited so long to get married, she feels absolutely entitled to the lavish wedding of her dreams, complete with Ecuadorian roses to the tune of $7,000 — and I mean just for the roses. She said the wedding she has her heart set on will cost $48,000.

You should have seen the look on her fiancé’s face at the mere mention of that price tag. He was visibly mortified. She went on to say that she wouldn’t dream of putting this expense on credit cards but a home equity loan (curiously also known as HEL) would be the way to go. They didn’t say, but I got the feeling it was his home equity she is eying.

She said rather nonchalantly, “$48,000 isn’t really that much to pay back. I don’t think it would be that hard.”

I couldn’t help wonder: If coughing up $48,000 in big monthly payments after the fact wouldn’t be a problem, why hasn’t she been saving that kind of money all along? I ran some numbers on a $48,000 HEL at 7 percent on a 15-year schedule and discovered it would be about $285 a month … for 15 years! Their kids will be getting ready for high school and she’ll be turning 50 before they finish paying for their wedding.

Dr. Phil was great … counseled them exactly right (like he needs my stamp of approval). I recall his reaction was something close to “Are you out of your mind?!” and he pointed out the typical wedding ceremony lasts for about 30 minutes.

He went on to advise they should do whatever they must to keep the cost of the wedding within the limits of the cash they have. I believe he sided with the groom, who had a backyard barbecue wedding in mind. Actually, I thought the idea had real possibilities.

Have you ever had a home equity loan? Unlike our bride-to-be, who obviously never has, let me tell you they’re not that easy to pay back. Oh, I know, lenders make it sound like your home equity is a stack of $100 bills sitting in a vault somewhere just waiting for you to come down and pick up.

Home equity is one of those things you should consider out of reach for now. For most people, home equity is the one appreciating asset they’ll ever know during their lifetime. Nibbling away at it to pay off credit card debt, a vacation or a wedding is just foolish. The goal of homeownership should be to one day actually be a homeowner, not a forever mortgage owner.

I hope Dr. Phil does a follow-up show on our couple. I’ve got my fingers crossed that they heard him loud and clear. The best wedding gift they can give each other is a receipt that says “paid in full.”

Marriage is tough enough without the complications of a heavy load of debt.

Dear Mary: It’s a long story. In a nutshell, I ran up more than a few credit card accounts (OK, seven), lost my job and stopped making payments. Now all of those accounts have been charged off.

Can these creditors still come after me? I no longer hear from any of them, or from any collections companies either. Is it possible that I just don’t owe the money?

— Anonymous

Dear Anonymous: It does make sense that you no longer owe the money. After all, if they’re charged off, it sure sounds like the debt went away, right? And it did — just not away from you. Even though those accounts have been charged off, you still technically owe the money.

While statutes of limitation vary from one state to the next, in the most basic terms, a debt is owed until it is paid.

In addition to damaging your credit score, an unpaid charge-off could really hurt you when applying for a mortgage, renting an apartment or competing for a job. Most businesses are leery of someone with long-term unpaid credit accounts. Many will overlook a previous history with late payments if you eventually paid what you owed, but usually, they’re less forgiving if you did not.

Your charged-off accounts will remain on your credit reports for seven years and then must be removed under the Fair Credit Reporting Act. So, if you decide not to pay, you will have to wait seven years from the date of the last activity on those accounts for the charge-off(s) to no longer affect you.

You made a mistake and hopefully learned some things that will prevent you from making the same mistake in the future. The best way to move forward is to clean up the debt mess you made by paying what you owe and not falling into this trap again.’’