If you are in financial trouble, you may be thinking about filing bankruptcy. Bankruptcy is a tool that can help individuals eliminate their debt. There are two types of bankruptcy that individuals can file Chapter 7 bankruptcy and Chapter 13 bankruptcy. Both chapters of bankruptcy give individuals ways to get back on the right financial path. If you are thinking about filing bankruptcy and you are a joint account holder or authorized user on someone else’s credit card you may be wondering how your bankruptcy will impact them. Below we will discuss how joint account holders and authorized users are impacted when someone files bankruptcy.
What Is an Authorized User?
An authorized user is someone who is allowed to use someone else’s credit card but can’t make any changes to the account and isn’t liable for payments. An authorized user can charge on a credit card without being financially responsible. Instead, the account holder is responsible for the debt.
What is a Joint Account Holder?
A joint account holder is someone who shares full responsibility for the credit card account with another individual. A joint account holder can make changes to the account, request more credit, and is on the hook for payment.
What Happens If I am an Authorized User on a Card and File Bankruptcy?
If you are thinking about filing bankruptcy and you are an authorized user on someone else’s credit card, you may be wondering how it will impact the credit cardholder. Filing bankruptcy will have no impact on the account holder if you file bankruptcy. An authorized user doesn’t share a credit report with the account holder and thus, filing bankruptcy will not have any bearings on the account holder.
What Happens If I am on a Joint Account with Someone and I File Bankruptcy?
A joint account holder is different from an authorized user because both re jointly liable for the debt. If you are a joint account holder and decide to file bankruptcy, you won’t be liable for the debt. However, the joint account holder will still remain responsible. Although, the joint account holder will be impacted this does not mean that their credit score will be impacted by your bankruptcy filing. Both credit scores are separate however what the company decides to do with the account is another story. Many times when a joint account holder files bankruptcy, the credit card company will close the entire account.
If you want to file bankruptcy and are worried about how the joint account holder will be impacted you have a few options:
- Call Your Credit Card Company – You can begin by calling the credit card company to ask if you can be removed from the account before you file bankruptcy.
- Close the Account – If there is no balance or if the joint account holder wants to pay off the balance before you file bankruptcy, you can close the account.
If you are thinking about filing bankruptcy in Staten Island or New Jersey and are worried about how it may impact a joint account holder, give us a call today. We can answer all of your questions about bankruptcy and how they may be impacted. You Can call us at (973)-979-9078 or email us at karra@klkbankruptcylawyer.com