Authorized User - am I in trouble?

[witchwith3]

Hello.

My parents are filing Bankruptcy next month. I can't remember if it's 13 or 7, so I don't know if the answer to my question will make a difference or not.

But this is my question. I am an authorized user on 2 of their AMEX CC (when things were great, I was using their outstanding credit rating to build up my struggling credit rating). The bankruptcy lawyer told my parents that AMEX could file a claim against me for the difference between what the original balance was and what the charge off is. Is that something AMEX can do right away, or do they have to wait the 5 years (that should answer if it's 13 or 7) first. And is it something they can do at all? Is it possible to have me removed as an authorized user BEFORE they file the papers??

Any and all advice is greatly appreciated.

Thanks!

[AngelinaCat]

From what I have read, you are not responsible for the balance on those cards. If you are not a co-owner (like a co-signer on a car loan for example) of the credit card accounts, AMEX can threaten and bluster all they want trying to intimidate YOU into paying off the debt, but you are not legally responsible.

Here is a link to an article that I found:

http://www.creditcards.com/credit-card-news/ossenfort-credit-card-authorized-user-collections-1292.php

Other members with actual first-hand experience, will chime in I am sure.

Welcome to the forum.

[witchwith3]

Ok, so I can't post a link, but this is what I found on "bkforum" ... I think that I am, indeed, in trouble

I am an AU on my dh's American Express, but I am not financially responsible to pay the bill. The key is that I am an AU, not Joint.
<{POST_SNAPBACK}>

Do a search on the board. Someone was kind enough to post the added Amex authorized user cardholder agreement which states that the AU is responsible for the account in case the primary cardholder cannot pay up.
I'll try to find it and edit my post here.

EDIT: I am not sure if this link works for others since it includes session information, but here you can read the additional cardholder agreement.
I quote:

"Terms and Conditions
By entering my name on the application form, I represent that I am a Basic Card member having a Clear from American ExpressSM account with American Express and I ask that an Additional Clear from American ExpressSM be issued on my account to the individual whose name appears in the "Additional Card Applicant Information" section of the application form. I understand that an Additional Card will not be issued if I have a defaulted account with you or if the Additional Card applicant has ever had a defaulted account with you. I agree to be liable for all charges to any Basic and Additional Card issued on my request.

Additional Cardmembers may be responsible for payment of their own charges if the Basic Cardmember fails to pay them, and their own credit record may be affected by non-payment of the account. I have advised Additional Card applicants that you may obtain and exchange credit information about them in the same manner as that described below.

The Additional Card applicant is aware that you may verify and exchange information on the applicant, including requesting reports from consumer reporting agencies. If they ask whether or not a consumer report was requested, you will tell them, and if you receive a report, you will give them the name and address of the agency that furnished it. If the Card is issued, they have authorized you and your subsidiaries and affiliates to contact these sources for information at any time, to use information about them, including information from this application and from consumer reports, for marketing and administrative purposes and to share such information with each other unless I direct you not to share with your affiliates and subsidiaries certain credit information (other than transaction or experience information) about me by writing to you at: American Express, P.O. Box 7852, Ft. Lauderdale, FL 33329. (Please include your Social Security number)."

[witchwith3]

That is supposed to be credit board

[ValleYum]

Ask your folks to call AmEx and remove you as an authorized user if they are able to do so BEFORE they file for bankruptcy.

I was an AU on one of hubby's accounts and it is now showing post-BK on my credit bureau as a "negative account".

Good luck!

[df04527]

Did you actually sign an application form with AE? Authorized users are not, typically, responsible for the bill, they have only been authorized by the owner of the card to use it. If the card owners just called up and added you instead of filling out an app, i don't believe you are responsible.

[witchwith3]

Did you actually sign an application form with AE? Authorized users are not, typically, responsible for the bill, they have only been authorized by the owner of the card to use it. If the card owners just called up and added you instead of filling out an app, i don't believe you are responsible.

I'm pretty sure I did It's been a while.

[Floridagail]

I had a chargeoff appear on my report for a AU account I was on my BF Sears card. I disputed it with all 3 cra, They removed it totally. I just said I was removed as a AU, not my account. They removed it.

[witchwith3]

As I look more and more into this, AMEX works very differently than the rest of the CC co. I'm hoping that removing me as an AU, it will save me somehow from being held liable.

[Pizza]

Absent a written agreement of liability from you, Amex shouldn't have a leg to stand on. Primary cardholders can't force authorized users into liability without consent.

Would you by any chance have the paperwork that came with your card when you activated it? By activating the card, you MAY have agreed entered into such an agreement. In this instance, you would not be an authorized user, your name would actually be on the account as if you were a primary cardholder. My wife was an authorized user on my cards and vice versa. We've never seen any clause with a credit card that invokes liability of AUs.

[HHM]

AMEX is different. They do a disclosure in their first statement to the AU that states that the AU is responsible for charges on the card. Also, I believe when you go through the activating process, they tell you (although I might be wrong about that).

Just beware, AMEX DOES NOT have authorized users, if your name is on the card, you are liable.

[pamkev]

I'm so glad I took my daughter off as AU on our AMEX months ago. We haven't filed yet but will very soon

[witchwith3]

AMEX is different. They do a disclosure in their first statement to the AU that states that the AU is responsible for charges on the card. Also, I believe when you go through the activating process, they tell you (although I might be wrong about that).

Just beware, AMEX DOES NOT have authorized users, if your name is on the card, you are liable.

I'm pretty sure I'm liable for it. I had a card with my name and the account # was 2 digits different from my dads account #. The bills come to my address, but in his name and AMEX will not talk to me about the account at all - it has to be my dad or he has to authorize me to talk with them. He's going to have to include the AMEX in his bankruptcy, but his lawyer is going to tell them that the charges were mine (which they were - mostly) and that should get my dad off the hook.