Questions about a joint account

[thephil]

I hold a joint account with my mother. I had one with her during my pre-adult years as a place to keep my money safe. I have since gotten my own bank account but never took my name off of hers. It's a matter of convenience to have my name on it should she need to borrow money or vice versa. She recently changed accounts due to the filing of bankruptcy.

Now, I've heard from people whom it has happened to that if you're a co-holder of an account with someone filing for bankruptcy you are affected as though you are filing, too. I don't know the guy who said this happened very well, and from what I've heard I'm not sure I trust his word, but why would he make something like that up?

My question is, should I give my mom the money to close the account (since she just opened it less than 6 months ago, there's a $25 fee to close it) because I will be treated as if I'm filing, too? Is this something that happens? Should I worry about it? Any knowledgeable advice would be GREATLY appreciated.

(Also her bankruptcy attorney says this is not something to worry about and it doesn't happen, but I'm still worried about it and feeling pressure from my girlfriend and her roommate, whose ex-boyfriend says this happened to him.)

[lrprn]

I hold a joint account with my mother. ... Now, I've heard from people whom it has happened to that if you're a co-holder of an account with someone filing for bankruptcy you are affected as though you are filing, too.

You did not file bankruptcy, your mom did. Her filing cannot affect you.

Very rarely the credit bureaus mess up and something negative related to your mom's bankruptcy may show up on your credit report. If that happens, all you have to do is dispute it in writing and it must be corrected immediately.

Your friends may be thinking that having your name on this account is like being a co-signer for a loan or a credit card. If you co-sign for someone's loan or credit card and they file bankruptcy, then you as the co-signer would owe that money. This is nothing like that.

Do not close the account! That could raise a red flag to your mom's trustee and may complicate your mom's bankruptcy.

Listen to your mom's lawyer - he/she is right. In this case, your friends are wrong.