I have a family member who added me to their credit card to help me out. I have made charges against this card and have made payments to the card. Some of the payments were larger amounts. If I file chapter 7 how will this card be handled? Will the payments I made to the card be a preference? Will the credit card company have to give back the payments to the trustee? Will the family member have to give back the payments? I don't want to hurt my family member's credit. Help!
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You didn't give details on the "amount" of payments. If the payments were $600 or more over a 90 day period prior to filing then yes the cc company will have to give the money back to the trustee.
You should stop using the card, make smaller payments and file (unless you did already) a week before the new law changes (oct 17). Was your last payment $600 or more? If yes then waiting won't matter. If no then send little or no payments in for the next 2 months (don't exceed 600) and you should be fine. -
Thank you for responding. The payments were over $600 each month, except for July. I was trying to reduce the debt to protect my family member's credit. Will they go after my family member? Will it affect their credit?Comment
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If you are only an authorized, your family member will be held liable for the balance if you stop paying.Comment
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If you did it to benefit a family member and the cc wasn't in your name then they can probably go after the family member to get it back. If you are liable for paying back the credit line then they would go after the cc company.
Your atty (if you have one) can probably recommend a way that can help you. Maybe if the family member pays you back for this potential preferential transfer you can have the cash on hand which maybe exempt.
HHM may have an answer.Comment
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I am an authorized user and I have a card in my name, however, the account belongs to my family member. I made additional payments (exceeding $600) to lower the balance on the card because my family member was getting uncomfortable with the balance. I was not expecting to even be considering bankruptcy but we were just recently hit with another major blow and now must consider it. The payments I made were directly to the cc company, not to my family member. Is that a preferential transfer?Comment
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I read in "bk for dummies" that it is a pref transfer, but a lawyer could best answer it.
Sorry.Comment
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