Question about joint credit cards

[KevinR]

If I file Chapter 7 but my wife doesn't, how does the CC situation play out?

I'll have to confirm this but I don't think that we have any joint cards, in the sense that we both signed the application. Most of the cards actually predate our marriage.

However, both of us have gotten cards for the other on our existing accounts. For instance, my Discover card I had before we were married and I then had them send my wife a card. She didn't sign anything, but she does have a card. My name is the only one on the bill. If I get this discharged through Chapter 7 can they go after her for the debt?

This is in PA if it matters.

[LuckyMeLucky]

If she is only an authorized signer on the account nothing will happen to her.

[StaciMM]

If only one of you is filing, then the one who files should contact the creditors and remove the other from AU status. Your total household income & expenses will still be used for the BK means test.

If you live in a community property state, it won't matter if you are both on the accounts or not as you each own & owe everything together. If you are joint on any accounts, those will only be discharged for the one who files.

[KevinR]

If only one of you is filing, then the one who files should contact the creditors and remove the other from AU status.

I thought about that but figured it might be seen as attempted fraud. At least if you did this and then immediately filed BK, which is about how it would play out.

If you live in a community property state, it won't matter if you are both on the accounts or not as you each own & owe everything together. If you are joint on any accounts, those will only be discharged for the one who files.

Yeah, I already checked that, PA is not a community property state.

[StaciMM]

Its not fraud because the AU is not obligated to pay the account. If it is your account, you can add or remove someone as you see fit. BUT, if you don't remove them, then the BK will report on the AU's credit report since the account was IIB, and FICO doesn't distinguish between AU and responsible party. Getting the tradelines removed afterward might be difficult.

If you wait until the account is in bad shape, the creditor may not agree to make changes.

[calamityjenn]

Sorry to bring up an old thread, but I'm curious about the reverse here... My folks have be on a card as an authorized signer. I don't really use it except for emergencies where they're asking me to pick something up for them, so there would be no issues of debt accrual on my end with it, but would things on my credit affect that arrangement, like would they be forced to drop me as a signer? Would it affect their credit if they didn't? Or would they even be notified?

[keepmine]

As an AU, you have no liability for the charges and no need to list that card as a creditor in your bk.

[calamityjenn]

So would they be notified at all? The parent's card is not the exact same.. not sure what you'd call it, brand, I guess? But they're both coming out of the same overarching bank/creditor.

(my not-subtle way of finding out if I absolutely would have to tell my folks about this right away. my grandpa has cancer, and I'd rather not give them one more thing to worry about at present.)

[StaciMM]

Calamityjenn-

You're not a responsible party on the card, so it isn't your debt and doesn't need to be listed on your petition. My only concern would be-do you have any debts with the same creditor? Research to find out if that company is affiliated in any way with yours. It might be for nothing, but the only thing I can think of-there is a remote chance that it might get noted as "IIB" if you have something else with that company.

Such as-Citibank owns (alot of, don't know if its all of them) Sears accounts. If you file BK on a Sears account, and you're an AU on a Citi account, when the creditor is notified of your BK they may note both accounts.

Its a stretch, but about the only thing I can think of that might be an issue.

[SinkingFast]

Calamityjenn-

You're not a responsible party on the card, so it isn't your debt and doesn't need to be listed on your petition. My only concern would be-do you have any debts with the same creditor? Research to find out if that company is affiliated in any way with yours. It might be for nothing, but the only thing I can think of-there is a remote chance that it might get noted as "IIB" if you have something else with that company.

Such as-Citibank owns (alot of, don't know if its all of them) Sears accounts. If you file BK on a Sears account, and you're an AU on a Citi account, when the creditor is notified of your BK they may note both accounts.

Its a stretch, but about the only thing I can think of that might be an issue.

I got a cashier's check the other day from our bank to pay our rent. Landlord always takes forever cashing personal checks. Low and behold, I notice, in fine print, in one corner, the cashier's check is backed by funds held by CitiBank. We have a CC backed by Citi with a sizeable sum of debt on it.

I've researched on the Net and can't find if our bank is really owned by Citi or not.

Is it possible that our bank just uses CitiBank's cashiers check system. Which I would find that odd that one bank would voluntarily hand over interest funds to a competitor. The few days or week or whatever time it takes to cash that cashier's check somebody is making interest on the money. Or, am I right to worry that Citi owns our bank??!!

[StaciMM]

Cross-collateralization is usually only an issue for credit unions-there is something in most member agreements making all accounts connected.

[SinkingFast]

So you're saying, if we had a CC on our bank, we could have problems with our checking acct. But just because Citi MAY own our Banking Company, we may not have any problems?? Is that right??

I just learned that our auto insurance company is one of the "ancestor" or parent companies of CitiBank. Now I worry we'll loose our insurance after we file BK even more than before.

[StaciMM]

I'm saying that if you have a bank rather than a credit union, it is more than likely not an issue. Call your bank and ask if they cross-collateralize accounts.