Parent bankruptcy, child on their credit card

[headache]

I am 26 and my mother is going to file bankruptcy. About ten years ago she added me to one of her credit cards. The balance on this card is $20,000. I have never touched this card, I had forgotten that it even existed, in fact I was originally very reluctant about being added to the card. However, my mother insisted at the time that co-signing was a wise move to build my credit history. I already called the bank, and the bank said they will not remove me from the account until the balance is settled.

What will happen to me when my mother declares bankruptcy? Will I or could I as a result become legally bankrupt too? What will happen to my credit concerning our joint credit card?

I am deeply saddened to be caught in this stupid mess. For years I have been vocal against my mother regarding her increasingly risky financial and business endeavors. She not once listened to me. Then, bamm, within a few months everything caves in, as I warned it would, and now I am trapped in her finances. I am a working student, I have been supporting myself since 5 years now, and I feel I am a responsible and financially conscientious person. Why the heck is this happening to me, and what is the best way to deal with it?

For instance, is it possible to have the bankruptcy disregard the one credit card? While she enters bankruptcy, I could begin to pay off her $20,000 (leaving the account open and my credit unharmed, and avoiding bankruptcy myself).

I am in such a panic right now. I really appreciate your help. I was able to find another parent-child case http://www.bkforum.com/showthread.ph...ghlight=parent
But there, the situation is flipped around. The child is declaring bankruptcy and wants to protect a parent with whom she shares a bank account.

[headache]

We are in California, by the way, if that is of any relevance.

[Rick9972]

Dear Headache, Please take several deep breathes, and have a drink on me *Hands over bottle of Brandy*

OK here is what is going to happen to you and how you will deal with it. You need to be certian you are a joint card holder and not just a joint user.

If you are just a authorized user on the account, then no matter how hard the bank trys, you are not responsible for anything. Your mother will have to remove you from the account as a authorized user.

Assuming that you are jointly responsible for the account your problems are wide and varied.

1. Just because your mother files bk has no bearing on you. (Please watch your credit reports, as the one account will receive a BK notice, you must make sure that you as a whole, are not listed as in BK.)

2. You must make the payments on the account during the BK process. Your mother is protected by the Stay, you are not.

3. At the end of the BK process your mothers name will be off the account and it is all yours. Keep making payments.

That is the end of it. BAnks almost never let joint account holders "take their name off the account" as they look at "The more names they have, the greater the odds, someone will pay."

[dingdong]

Have you ever actually used the card-literally signed for something you bought using the CC?

If you havent, the CC company CANNOT come after you if you were simply an AU on the account. You have to have signed for something and even then it is iffy as you had no contract with the CC for the account.

Where they may be able to "get you" is stating your signature constitutes knowledge and acceptance of the terms of the CC.

IF you didn't buy anything, you never accepted those terrms.

What can and may happen is the TL may be marked IIB on your CR, which you wll proactively have to work at to get removed.

[headache]

Dear Headache, Please take several deep breathes, and have a drink on me *Hands over bottle of Brandy*

Thanks for the drink, Rick. I really appreciate it. Cheers! I am tremendously relieved to read your reply.

Yes (Rick and dingdong). I am not an authorized user, I am the second responsible party! My mother wanted me to build a credit history by riding along her credit card use. Her plan was, once I have a credit history and can get loans, she was going to ask me to co-sign for her to support her to do further business ventures. This is so enfuriating right now. I didn't understand at the time why she was so forceful and nagging about me signing on to her credit card. I certainly didn't understand the consequences of my signature like I do today. Anyway, I'm sorry to rant. I'm just so upset right now, I feel like I've been led by the hand by someone I trust into heck I don't know what.

[dingdong]

So, you signed a credit app along with your mother?

That is a different case entirely than being an AU.


If this is the case, you are liable for the debt if she defaults. Her responsibility goes away with discharge, you are still on the hook.

Sorry. And she has to list all of her debts in BK, you cannot pick and choose.

You might be able to work something out with the bank, I honestly don't know, to preserve your credit.

But the debt will be included in BK and they will most likely not discuss anything with you until she is discharged.

Good luck.


DD

[2Bshinyandnew]

Thanks for the drink, Rick. I really appreciate it. Cheers! I am tremendously relieved to read your reply.

Yes (Rick and dingdong). I am not an authorized user, I am the second responsible party! My mother wanted me to build a credit history by riding along her credit card use. Her plan was, once I have a credit history and can get loans, she was going to ask me to co-sign for her to support her to do further business ventures. This is so enfuriating right now. I didn't understand at the time why she was so forceful and nagging about me signing on to her credit card. I certainly didn't understand the consequences of my signature like I do today. Anyway, I'm sorry to rant. I'm just so upset right now, I feel like I've been led by the hand by someone I trust into heck I don't know what.

I'm probably reaching here, but, f you were a minor when you signed and have never used the card or otherwise acknowledged the existence of the account in any way that may be something to explore as far as a defense.

[Flamingo]

2Bshineyand new made an excellent point; if you were added to this account at age 16 (you said you are 26 and that your mother added you 10 years ago) and you signed it not knowing what you were getting into at the time, you might have a case. The issue here is that the other cosigner is your mother and you may not be able to get by the parent/guardian issue as the bank could state she opened the account for you and made the payments. When your mother files, you will need to watch your credit reports that the BK does not end up on any of them. Dispute immediately if it does as you are not a party to the BK. That can be a problem for you and there was a Class Action matter filed several years ago (don't know the outcome) of a class of filers who had BK's showing up on their credit reports when they did not file but were authorized users or cosigners not filing BK (i.e., husband and wife, husband filing but the BK showing up on the wife's credit reports). You may want to research that class action to find out its outcome or if it is still open.