Ch. 13 Authorized User Questions

[juliusrosen]

First of all....greetings & thanks in advance!

I am going to be filing a Chapter 13. I am married but am going to be filing by myself. All of it is unsecured debt. Several of the cards that are showing up on my credit report are my wife's with me as an "Authorized User". I am not a joint account holder on these, only authorized. All of these cards are showing up on my Credit Report with me as an authorized user, not joint...yes much of the debt was incurred by me but we would like to keep these cards open and not have her accounts closed. Those cards are all current & in good standing. I'm hearing mixed things about what will happen here. I'm/we're not looking to discharge this debt, I don't think you can right? The card's are in here name...I'm only an authorized user? I think that these cards have been added into the final tally of what my payments will be on a three year plan. I'm no exactly sure. If they're not going to be included, then I would think my amount to pay in the 13 would be less. My attorney says that he's pretty sure that these card accounts will be closed but I'm not too sure about that.

Bottom line, how do I keep her cards open, she's not filing. Do we contact the creditors directly or not include those accounts? Hope that made sense. BY the way, the state is TN>

Thanks!

[kornellred]

There must be a way to have the status of "authorized user" nullified on your wife's credit cards. You should look into that first. Then - there is the problem of getting those cards off of your credit report, since they are not your responsibility. While they are listed on your credit report, you share responsibility for the debts whether you like it or not. The credit card entities may simply not allow the removal of the debts from your credit report. And if that is the case, then your wife's credit cards will have to be listed on the creditor's matrix in the bankruptcy filing. Then, it is all but certain that the cards will be shut down. Good luck.

[LadyInTheRed]

If you are only an authorized user, I think the cards will be okay as long as they aren't listed as creditors on your petition. Because TN is not a community property state, I assume you have no liability to pay on those cards, even if you did make the charges. If I am right about that, then the cards do not need to be listed on your petition.

The reason the payments on those cards are included in the calculation of your payment is that the portion of her income being used to make the payments is not being contributed to household expenses.

[kornellred]

LITR is right - I made a false declaration in my response above. An "authorized user" is, by definition, not a joint owner of an unsecured credit card account and is not responsible for the debt. The owner of the credit card account knows this up front when requesting the authorization. But your attorney might be right - your wife's cards may be shut down even if they are not required to be listed in your bankruptcy petition. The credit card issuers can pretty much do anything they want if they hear about your bankruptcy filing, which they probably will by some means.

[kmjatl]

Have her remove you as an authorized user, then dispute it on your credit report because you are not an authorized user. Have her tell the cc company you're separating if necessary. See if that helps.

[AngelinaCat]

Have her remove you as an authorized user, then dispute it on your credit report because you are not an authorized user. Have her tell the cc company you're separating if necessary. See if that helps.

The debt is still there, nonetheless. This situation may be similar to that of a co-signer on a loan. If one co-signer defaults, then the other is responsible for the full amount.

Be careful of even suggesting a 'strategic separation' or 'strategic divorce'. These things, while well intended, have a life of their own that is NOT pleasant. 'Hub and I have been there and done that.

[AngelinaCat]

Hi Julius. Welcome to the Forum.

For the above reference to my 'Hub to make sense, my DH's username here is AngelinaCatHub. He usually signs his posts as "'Hub".

Good wishes to you as you start on your journey to a Financial New Start!

[juliusrosen]

Hey thanks y'all and thanks for the welcome. I'm still trying to digest all this information.

So let's say a Target Card that has been opened by my wife(I am only an authorized user) has a $3000 balance, shows up on my Credit Report(as an Authorized user), has been listed in the 13 & added in to my plan of repayment - what happens to her payments? They shouldn't remain the same as they were while I'm in the Ch. 13 - should they and on top of that they're going to close the card even though she's current?

[juliusrosen]

Hey, I'm still confused about something - as an Authorized User should these debts be listed on my(filing by myself) Chapter 13? I doubt I'll be able to get them off my credit report in time...actually I know I won't be able to but the thing doesn't seem like an accurate method. If the authorized user accounts are reported in my 13, then I'm paying a percentage of that amount off - yet my wife will still receive her normal statements with amounts due regardless of whether or not they close the cards?

[AngelinaCat]

Hey, I'm still confused about something - as an Authorized User should these debts be listed on my(filing by myself) Chapter 13? I doubt I'll be able to get them off my credit report in time...actually I know I won't be able to but the thing doesn't seem like an accurate method. If the authorized user accounts are reported in my 13, then I'm paying a percentage of that amount off - yet my wife will still receive her normal statements with amounts due regardless of whether or not they close the cards?

This what I do not know--how the debts of an authorized user are treated. I was authorized user on 'Hub's major cc through the credit union. Also, his brother, and another person were given permission to use the card--but never put on as 'authorized users'.

We both treated the debt as totally ours--we had allowed them to use the card. We filed jointly, so this issue did not come up.

[AngelinaCat]

Now that I'm thinking about this a little, any transaction you make with a card, will ask you the name that is on the card. As an 'authorized user', you have a card that is part of your wife's account, but has YOUR name on it. And you sign the ticket when it is presented to you.

I got into trouble for supposedly buying a certain software package. I did not, but 'Hub did, and used my card because his was in his wallet out in the car, while my wallet was in my purse in the house.

I do not know if this helps you or not, but will give you a little insight into the situation.

[TooMuchCredit]

An authorized user is not responsible for the debt or payment. You can request the bureau (s) remove accounts that show as an authorized user from your report.

[LadyInTheRed]

Your wife's credit card debts will not be paid through your Chap 13. Those payments are simply taken into account when determining your household disposable income.

Not sure why anybody is suggesting you should try to remove the cards from your credit report. They are a positive on your report that will help you rebuild as long as the cards are in good standing and have a utilization of 30% or less.

Your wife could try calling the credit card company and telling them that the authorized user is considering filing BK and asking whether that will have any effect on her account.

[juliusrosen]

Okay, thanks I'm starting to get a handle on this somewhat...as an Authorized User, the balance amounts on those cards only have an impact on the household disposable income amount - which will affect my payments. As far as whether or not my 13 will affect her credit cards depends on the creditor I suppose. I called one today & they said they wouldn't close her account.

we shall see. Thanks for all the knowledge.

[angel7821]

If the cards are in your wife's name and she is not filing BK I don't see why they would close her accounts. If you are the AU on her accounts and do not list these cards all should work out fine. I guess I would be surprised if the accounts did get closed.