Listing your income when you know you temporarily may be without it

[ausername4]

Hi. I have a question that I cannot determine if I’m being scrupulous or if this is a legitimate concern. Let’s take a pregnant woman who is still working, but plans to take a large period of time off after birth and is leaving open the possibility of not going back at all. If that person were to want to apply for something financial like a credit card offer that asks for their income, are they basically stuck not being able to apply or would it not be deceitful to just list their current annual income at the time of application? The question of whether it’s deceitful is where I’m stumbling.

 

[DaveBj]

The times when I’ve been in this situation and have actually asked about it, I have been told that what they’re interested in was my income right then, not what it may be at some point in the future.

 

[odile53]

You might want to ask instead how wise would it be to get access to credit when a person most likely won’t be able to repay it according to the terms of the grantor. Deceit sounds like a handy way to get something someone might not otherwise be able to afford, but realistically speaking, they’d be badly hit by the consequences of that deceitful act. It sounds a little morally questionable, and like a very bad financial decision.

 

[Dan_Grelinger]

Hi. I have a question that I cannot determine if I’m being scrupulous or if this is a legitimate concern. Let’s take a pregnant woman who is still working, but plans to take a large period of time off after birth and is leaving open the possibility of not going back at all. If that person were to want to apply for something financial like a credit card offer that asks for their income, are they basically stuck not being able to apply or would it not be deceitful to just list their current annual income at the time of application? The question of whether it’s deceitful is where I’m stumbling.

I had this same question 30 years ago when I was working full time at a summer job, but knew that when I went back to school in the fall, my income would be zero. My intent was to establish my credit, not to actually borrow money, so financially, it was an OK decision, as I never carried a balance and used the cards I obtained only rarely to establish a credit history.

The application did not ask for a prediction of future income. It asked for current income. I assume that if they wanted to know about my future income, they would have asked for my estimate of it. But they did not. So, instead of giving them information they did not ask for in place of what they did ask for, I gave them the information that they asked for, and let them conduct their business as they wished.

 

[Joe_Kelley]

I wonder if the courts would interpret it as “intent to defraud” if one later defaults on the card and tries to invoke bankruptcy.

 

[JimG]

Under the Equal Credit Opportunity Act (ECOA), while it is OK for a lender to ask about your current income and dependents, it is not legal to ask about pregnancy or about whether you are planning for a family or for more children, even if you are pregnant.

 

[Dan_Grelinger]

I wonder if the courts would interpret it as “intent to defraud” if one later defaults on the card and tries to invoke bankruptcy.

As long as you can provide proof of the income provided on the credit application, and as long as there was no intent to defraud at the time of the application (e.g. by signing the credit application agreeing to pay the debt, but knowing at that time that you would not), then there would be no fraud.