Authorized User on Amex

[Bankruptcy20]

I may have to file Chapter 7 in a few months. I have an Amex, and my wife is an Authorized User. There is currently a balance on the account, but I went ahead and removed her as an AU (I closed her account).

I checked the three credit bureaus, and the Amex shows up on her credit as "Authorized User", but the balance is the total (including my charges).

It seems if I file BK, that the other threads suggest that Amex may try to go after my wife for her individual charges that she made on her card before I closed it. The amounts are pretty small.

Does anyone have any advice, on the following?

1. Should I pay anything before I file BK? I am not as concerned over preferential treatment, as I may not file for months
2. Should we pay off her small charges to Amex? If so, how does one even do this, as the card is really mine, and wouldn't it tip off Amex as to that I may be filing? It's a bit weird to send just a partial payment out of the blue?
3. After closing her card, we contacted the bureaus to remove those cards, as they are closed. We only cited "Closed", instead of "Not Mine", as only one box was able to be toggled. Should we re-dispute these again?
4. She has a corporate Amex, and it is important to her that my potential BK does not impact her whatsoever... any other advice?

Thanks

[optimistic1]

1. If your thinking about filing BK, dont pay anything, you are literally burning cash in front of your eyes.

2. I don't see how either you or AMEX could do that, sounds like a waste of time.

A little net searching yielded these interesting posts.

"An authorized user of a credit card has the right to use the card but no obligation to pay it. "

Recent Changes in FICO Scoring Rules

In 2008, the rules for calculating FICO scores were changed to eliminate all authorized user information. If the principal card holder does not pay, the credit grantor can still report the authorized user as being delinquent, but the delinquency will not be used in calculated the authorized user’s credit score. Similarly, the authorized user’s score will not benefit from the good payment habits of the principal card holder.

"Being an authorized user on someone else's credit card account certainly has its perks. But it has its problems too."

"You get all the purchasing power you want as an authorized user, and the primary cardholder, not you, is contractually responsible for the bill. "



One of those posts was from Bankrate.com, a fairly reputable website.

I wouldnt worry about it, and just file the BK.

Her employer cannot discriminate against her because of a BK showing on her credit report.

[Bankruptcy20]

Thank you for the response. There are several posts within this forum, where users copied part of the Amex user agreement. Within it, it seems Amex is trying to claim that an Authorized User "may" be responsible for the charges on their dedicated card. This is more aggressive than what other cards do, where the general rule of thumb seems to be that AUs do not have any liability whatsoever.

I think after speaking to attorneys and doing the web research, we've done all that we could (closed her AU card, deleted the references from her credit bureaus, confirmed the deletion with Amex), and I do hope if I were to file BK in the future, that Amex cannot "reopen" this issue against my wife, who was only an AU.

Thanks for the reply.

[catleg]

Amex is a funny company, they are the only major national creditor that I know with a permanent blacklist for bankruptcy, i.e. once you file BK and include them, you're done, they will never give you a card again.

However, they cannot stop you from someone else making you an AU on their card or from getting a corporate card as an employee, effectively an AU also.

What I can't speak from experience about is, what happens to your AU's when you file for BK, clearly Amex has no legal right to collect but you never know how they see it until you go through with it.

Maybe someone else has actually experienced this and can speak to it.

You did the right thing doing the best you can to get her name off the account.

One other note: you really care not one whit about preferential payments, unless the payment is to someone you really want to keep the money, like a friend or relative. Preferential payment claims are just like shuffling deck chairs on the Titanic; the ship is holed and going to the bottom, you've already got a seat in a lifeboat, what happens to those people in the water doesn't really concern you. Just close your eyes and listen to the band. :-)

[freshstartfl]

I filed BK on 2 Amex cards, both of which my fiance was an AU on. The account #s on his cards were different than mine, and I also noticed the thing in the fine print about how he "may" be responsible for anything purchased with his account #s/cards. Luckily in my case, he'd never used either of them, so it was a non-issue.

If you were to even attempt to pay off just the amounts on your wife's cards, I wouldn't do it until after you're done w/ BK. I'd wait and see if they expected you to, or tried to force you to. No sense paying it now when there's no certainty that you'd have to pay it at all. Worst case scenerio, that part wouldn't be dischargable.

[pa308]

However, they cannot stop you from someone else making you an AU on their card or from getting a corporate card as an employee, effectively an AU also.

I dont know how true this statement is. From most of what I read on here, most say that they couldnt get an AMEX corporate card since filing bk

[catleg]

I dont know how true this statement is. From most of what I read on here, most say that they couldnt get an AMEX corporate card since filing bk

I am living proof. I included Amex in BK in '97 and I have a corporate Amex through my employer.

[Bankruptcy20]

Curious, is there a difference that people have seen from Amex between:

1) you have paid and closed your Amex, and then went BK?
2) you filed BK with an outstanding balance on Amex?

Did anyone get any brownie-points from Amex if you did #1? I think of Amex differently as most pay off the balance each month. If you did #1, were you able to get an Amex later on (not as an AU), or were you still blacklisted because you BK'd?