Joint credit card accounts and bankruptcy

On behalf of Bankruptcy Law Firm of Clare Casas on Wednesday, December 3, 2014.

Individuals in Florida who have filed for Chapter 7 bankruptcy may not realize that doing so can affect the credit of individuals with whom they are joint users on credit card accounts. This may include spouses, parents and children. Being an authorized user is not the same thing as being a joint user, so individuals should check to see how they should proceed. If the other individual is merely an authorized user, the individual who is filing for bankruptcy should have that authorized user’s status revoked. If creditors do attempt to contact the authorized user, that individual can explain that they are not responsible for the account.

If the individual is a joint user, the other user is considered responsible for the debt even if it is listed in the bankruptcy filing. In such a case, the debt still is owed by that joint user. That individual may suffer the same consequences for the debt that would be faced by the individual who filed bankruptcy even if they did not incur the debt.

One solution may be for the individual who filed Chapter 7 bankruptcy to reaffirm the debt. This means that the individual does not discharge this debt along with the others but instead agrees to pay it off. Even if it is a different type of bankruptcy and reaffirming the debt is not possible, the individual who incurred the debt may still consider whether there is an ethical obligation to pay it off.

Credit card debt can accumulate quickly, but it is a type of obligation that can be discharged by bankruptcy. An individual who is no longer able to keep up with payments may wish to speak with an attorney about their options in such a situation.

Source: CreditCards.com, “Shared card leads to collection mess after a bankruptcy“, Erica Sandberg, November 30, 2014