Author tells of discovering $200,000 in debt in her name

Kristin Collier said when she applied for a credit card at age 22, she was surprised to learn that her application was rejected. That’s when he discovered there was over $200,000 in debt to his name that he knew nothing about; these included various student loans and credit card balances.

He soon learned something even more disturbing: His mother, struggling with a gambling addiction, had taken out nearly all of the loans without her consent. CNBC reviewed legal documents in which Collier’s mother admits to borrowing money using her daughter’s name.

In Collier’s new book, “What Debt Wants: Family, Betrayal, and Insecurity in a Broken System,” he tells the story of his decade-long attempt to wipe these fraudulent debts off his record, how that experience affected his relationship with his mother, and the role debt plays in the lives of many Americans.

CNBC interviewed Collier about his experience. The following interview has been edited and condensed for clarity.

Annie Nova: How did you feel when you found out your mom was paying off all this debt on your behalf?

Kristin Collier: I felt like my mom was choosing the casinos for me, but that wasn’t the case. It took a broader understanding of addiction and the aggressiveness of the student loan industry to realize the damage done to it.

But this debt soured our relationship and made it difficult for me to trust him. At the peak of my debt, I owed $2,000 a month. I had to work multiple jobs to make these payments, and when I thought about my future all I could see was more debt.

AN: I’m curious what kind of damage you think was done to your mother.

: He shouldn’t have gotten these loans. If the private student loan industry had acted responsibly, they would have noticed that something was wrong with my credit history. The amount of money borrowed was well above what I would need to attend a public university in the state. Someone should have rejected the fraudulent loan application and, through that rejection, spared my mother and me.

AN: What connections do you see between gambling and debt?

: The gambling industry is incredibly predatory. The bulk of a casino’s revenue comes from slot machines, and the bulk of slot machine revenue comes from a small subset of gamblers. Casinos design an entire ecosystem around driving people to these machines and keeping them away from pain points on them. They use all kinds of tools to extort money and this experience creates debt and sometimes addictions.

AN: Do you know how your mother spends the money she borrowed?

: I’m not sure exactly how the loan money is used. I think most of them went to casinos to win back what was already lost. It’s possible that some of it was used to keep the family afloat – to help pay the mortgage, for example – because the rest [the family’s] the money had already been spent gambling.

AN: Did you know that your mother was addicted to gambling?

: My mother’s addiction seemed to have started around the time I started college, which meant I was mostly away from home during the years when it was at its worst. While I felt like we had less money than I did when I was younger, I didn’t realize addiction was at the heart of it.

AN: Why was it so difficult to erase debt from your records?

: Because I didn’t want to use the criminal justice system. As a result, getting loan companies to work with me and sometimes even talk to me was a huge challenge.

AN: How did you finally get it cleaned up?

: After 10 years of debunking this debt, I used the bankruptcy process to force a conversation, and my mother, lenders, and I signed documents that cleared the debt from my name. In some ways, I was lucky because bankruptcy was not a path to salvation for most students.

AN: How has debt affected your health?

: I was living in New York in my early 20s and was being harassed by debt collectors, I was sick all the time. I had ulcers, urinary tract infections, and stomach infections. I think the stress of living with unpayable debt was evident in all these illnesses.

AN: How does debt become a family problem?

: A family with fewer resources will likely mean more debt for their students, and perhaps for the parents too, if they take out a Parent Plus Loan. That is, the debt is first determined by the family and then often shared by the family. This is because we do not have universal free higher education, which is the only financing model that would make education a state “problem” rather than a family problem.

In my case, this debt hurt us all. With interest rates above 10 percent, we were spending our hard-earned wages on a growing debt burden. There was little extra income to save for leisure or family care, for retirement or housing, or for cancer treatment when my father fell ill. Paying off debt is always a brutal calculation; What goes to credits goes nowhere else.

AN: You talked to other people who owed money for your book. What are some of the biggest psychological effects of loans?

: We are told that debt arises from financial carelessness and immorality. So when people are faced with unpayable debt burdens, they feel bad, as if they were to blame. The anxiety stems from the constant pressure of juggling finances to try to make monthly payments. People worry about what happens when there is a housing crisis or a health crisis. And sometimes there is. They have to live with the worry of debt every week and year.

AN: You write about your daughter in the book. How will you try to protect him from debt?

: I will continue to push for free public higher education, which is the surest way to keep him and everyone else from going into debt.

My husband and I work for nonprofits and as educators, and while we will do our best to save for college, saving enough money is not an option for us or most Americans unless there is a significant change to the system. Very expensive. So no matter how much I want to, I may not be able to stop him from going into debt for his education.