Personal CC used for business expenses & CH 13

[pa333]

Hi all -

We are planning to file Ch 13 in a few months. My husband's firm REQUIRES him to use a personal CC for business expenses (flights, hotels, etc) and then reimburses. We have been deeply unhappy with this situation for years, have asked many times for a company card to use instead, but they refuse.

So, my question is... how will this work as we file Ch 13? Essentially we have one CC that we must keep using, though it has a relatively low limit ($5500), used strictly for business & the balance gets paid in full.

This situation makes us really nervous, but there is no getting out of it.

Thanks in advance for your input.

[becky20]

My guess (others will chime in as well I'm sure) is that when you file, all the credit cards will cancel your credit, so even if you wanted to keep using your one card, you wouldn't be able to...

[Flamingo]

I am very familiar with the big corporate world. First, if your husband is traveling I am assuming he is in a higher position in the company. Have him check his employment agreement as to whether or not he has to inform the company if he files bankruptcy. Secondly, since the card he is using now will be involved in your filing, he is screwed as to using that card for company purposes. I suggest he either speak with his boss or his HR rep directly to find out what can be done in that situation for him. He really doesn't have much of a choice here but remember he cannot be fired just for filing bankruptcy. In a situation such as this he may have to be provided a company guaranteed card to continue to travel.

[pa333]

My husband is an associate lawyer in a small firm... so he doesn't really have any pull whatsoever. The firm doesn't issue corporate-type cards to anyone. We have tried desperately to get some kind of corporate card because the reimbursements are oftentimes late, and one time they refused to reimburse a $2500 ticket. We are in PA, which is an at-will employment state. My husbands bosses are real jerks, and I have no doubt they would find a way to fire him if they found out about the Ch 13. We really must keep this a secret if at all possible. Can we use the card within the 90 days and try to get it reimbursed as close the $0 as possible (I don't think the gov't should have to pay for debt that his firm accrues, essentially) before filing? Or would that harm our ability to file? After we file we could try to get another low-limit card, even if the interest rate stinks, and use that for biz expenses?

[Flamingo]

My husband is an associate lawyer in a small firm... so he doesn't really have any pull whatsoever. The firm doesn't issue corporate-type cards to anyone. We have tried desperately to get some kind of corporate card because the reimbursements are oftentimes late, and one time they refused to reimburse a $2500 ticket. We are in PA, which is an at-will employment state. My husbands bosses are real jerks, and I have no doubt they would find a way to fire him if they found out about the Ch 13. We really must keep this a secret if at all possible. Can we use the card within the 90 days and try to get it reimbursed as close the $0 as possible (I don't think the gov't should have to pay for debt that his firm accrues, essentially) before filing? Or would that harm our ability to file? After we file we could try to get another low-limit card, even if the interest rate stinks, and use that for biz expenses?

If the card has a zero balance on it at the time you file, you do not have to include the card in the filing. However, your chances of the card surviving your bankruptcy are less than zero once the creditor gets wind of your filing and believe me, they all do eventually although it could take several months. There is no guarantee. Your husband could go and use that card in a few months and be denied flat on the spot because they can cancel it without notifying you. They can review your credit and cancel your card at any time for any reason.

I have worked with and for lawyers and CEO's all of my career and know the situation. It is probably in your hubby's employment contract that if he files Bk, he has to notify the firm or he can get canned. Pull out his contract copy and review before you do anything further. You are not going to be able to keep this a secret. Also, if anyone in his firm suspects anything going on (it's hard to keep financial difficulties under wraps or someone who knows him and your situation and is in contact with any of his coworkers could easily let something slip), all they have to do is look in PACER to see if he has filed.

I feel for your hubby as he is on shaky ground but in this situation, if he is well liked and does well at the firm it is always best to be honest about one's situation. Also, the other key is his employment contract with the firm. If I were your hubby, I would be open and honest with either his direct boss or the HR person in charge as to what to do before it all may backfire.

Best of luck to you and your hubby...

[lrprn]

I found myself in much the same position as your husband. My business credit card was issued through my company but is in my name and I am legally responsible for paying all the costs on it. Luckily I had never put anything personal on the card (business expenses only) and all my payments had been on time over the three years I had it before we filed Ch 13.

I talked with my company cc rep but because of the agreement my company had with the cc company, my company's hands were tied - they couldn't help me. So on the advice of my lawyer, I called the credit card company directly and asked to speak to their arrears/bankruptcy manager. I explained the circumstances and the manager reviewed my card purchases and payments history. He said that since I had been very reliable and had not made personal charges on the card, they would allow the card to stay open after we filed. He also asked that the card *NOT* be listed when we filed - I was able to do that because I made sure the balance owed was zero on filing day. However, the cc manager made it crystal clear that if they ever saw personal charges on the bill or if any payments were late during our Ch 13, my card would be immediately cancelled.

We're halfway through a five-year Ch 13 and I still have my corporate card. All payments have been made on time, and I've never made any personal charges on it. The cc company even renewed my card last year. So far, so good.

Ask your lawyer if your husband contacting the credit card company directly and explaining the situation would be a good idea. The way I see it is he has nothing to lose and it just might work out like my situation did. Tell him to promise that nothing but business expenses will EVER be placed on the card for the duration of your Ch 13. Even if it doesn't work out and the card is still cancelled, that would have happened anyway.

I'm so sorry this is adding even more stress to an already very stressful time for the two of you. I really hope this works out for him.