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Bankruptcy question

T

thirdlegstump

Banned
Got a serious question guys. I've got a somewhat young friend (Jo) whose mother is very ill and has medical and credit card bills stacking up to the point where paying back the debt is impossible.

Jo's mother has no savings and is incapable of working. Jo is still a student but is no longer a dependent as he generates some income through freelance work but his credit is not looking so good because he was put down as a secondary card holder of the debtor and the debt is shown in his credit report. He is unable to pay back any of the debt where the interest rate has maxed out.

Jo has since removed his name from the credit card account as a secondary and filed a dispute claim with Transunion to remove the bad credit report as Jo is a secondary and should not be liable for the account balance.

Jo is considering filing bankruptcy for his mother but not himself.

I understand that bankruptcy should not affect Jo's personal liability however the bankruptcy affect Jo's outlook in life in any way? Would getting loans for mortgages etc. be difficult due to his mother's bankruptcy? If so, what would be the cleanest, best way out of this sticky situation? What's the best way to protect himself and his little sister?
 
no, he is not responsible for his parents debt in any way (unless he had co-signed something or actually had joint credit)

kids don't get hammered for parents debts/bankruptcy

just get his credit report fixed from being a card holder
 
Paying a financial advisor might be a wse decision here. I know it might be expensive but he holds all the responsibility in cases like this and it's easy to get burned.
 
If the debt is not in his name, it should not affect him at all. Credit problems by one person aren't inflicted on the rest of the family if they are not personally involved in the accounts.

However, IANAL, and this is the type of question that requires an authoritative answer because the stakes are so high. The issue regarding him being removed as a secondary on the overdue account is a big one. He must make sure that is completely cleared up, since he apparently is already aware it has affected his own credit record.
 
The answer to your question depends on what you mean by "secondary card holder". You might be referring to a co-applicant like a spouse or you might be referring to an authorized user like a son or daughter of the primary card holder or an employee of a business. A co-signer might be jointly responsible whereas an authorized user might not be responsible. It really depends on how the secondary user was added and what documents they signed.

http://www.lawguru.com/cgi/bbs/mesg.cgi?i=805934040
 
Ironically (in an Alanis sense), my bar review class covered bankruptcy this morning. The answer I cut & pasted above was pretty much my initial thought, it just depends on what you mean by "secondary account holder" - not a term we learned today (but at least I finally learned the differences b/w Ch. 7, Ch. 11, and Ch. 13).
 
yeah, what lizardboy said

if it was joint credit, he is screwed. if he was an authorized user, then he is clear
 
If your friend is simply an authorized account holder, than he is not liable for any of the debt. HOWEVER, if by secondary you means the accounts were joint accounts, he is screwed and will be obligated for anything his mother does not pay. In this case, if she declares bankruptcy, he will be liable for all debts on which he is a joint owner.

He may wish to get a copy of his credit report and THOROUGHLY analyze the information in order to determine whether he owns the debt jointly or not. I did not think authorized users would even see accounts on their credit report if they are not an owner. I know when I have listed an authorized user on an account, I think the only info they request is name. As such, I don't see how they could tie an account to a credit report by name only.

More than likely, he is a joint owner. Assuming this is so, his best bet would be to declare bankruptcy for both and get it out of the way now.

EDIT: Stupid long-winded replies that means the OP gets answered before I actually finish my post... D'Oh!
 
Hm..could finding out what type of secondary card holder he is/was be done by calling the bank and simply asking? Or will that have to be done by the primary card holder? What if the bank rep says since he is a secondary card holder, he is not liable for the balance? Should those words be trusted? Can a simple phone call like that be held against them in case the info turned out to be false?
 
if he just disputes the entry in his credit report, i think they have to send him something that shows he is a joint owner of the debt
 
Originally posted by: deathkoba
Hm..could finding out what type of secondary card holder he is/was be done by calling the bank and simply asking? Or will that have to be done by the primary card holder? What if the bank rep says since he is a secondary card holder, he is not liable for the balance? Should those words be trusted? Can a simple phone call like that be held against them in case the info turned out to be false?
Click to expand...

Get things in writing.

Koing
 
Unfortunately, I can't help with your question. If your friend is interested in contacting an attorney, I used to work for a bankruptcy lawyer in NYC. I believe he offers free consultation. I've never actually used his services, but giving the number a call might be helpful.

http://www.cjalaw.com/index.html
 
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