Received a cosign for cc...now they are filing for BK

[Anonymous]

Hello everyone! First post after reading so many questions in the forum. I think this is great!

I received a cosignature 5 years ago for a credit card in order to establish credit. By piggybacking on the other persons credit, the bank deemed that I qualitfied for a $5000 limit. I only wanted $500 but thats besides the point. Ive paid my card faithfully and believe Ive helped the other persons credit along the years. Heres the problem, the other person is considering to file for bankruptcy.  Will his BK affect me since he cosigned for ME?  Ive looked online in general seraches but most answer aim towards the opposite situation.

Very worried that MY credit will be affected because of this.

[SoulMaster]

This is one of those YMMV situations, but...

1.  It should not effect you:  If you pay your bills on time, the account will stay current and shouldn't report on your CRs as IIB.

If the situation were reversed, and you were the co-signer on an account that was IIB, you'd be responsible for the debt anyway... The only way it would hurt you is if you stopped paying.  Here's the best mantra (though it doesn't apply in this situation because it's too late):  I won't ever BE a co-signer and won't ever USE a co-signer. Period. 

2.  You can call the OC and request the co-signer be removed from the account.  They may or may not do this, but be proactive about it.

They may want to close the account if your credit can't stand on its own merits, and they MAY invite you to reapply, too.  It's a crap shoot and fairly creditor specific.  If they want to do this, make sure it's PIF before you close it.  Also, you might have to get around Peggy.  I've found that simply asking for someone who's English is their primary language gan get this done about 60% of the time.

3.  You're responsible for the debt anyway (see the explanation for #1)

If you aren't proactive, and they close it on you, you're going to have to pay it off anyway, so go back to #2 and be proactive about it.  Regardless, on your report it SHOULD say "closed", rather than giving you an orphaned IIB... but you'll want to keep an eye on it.

Best of luck,

-SM

(see the disclaimer in my sig)

[Anonymous]

Thanks for the reply SoulMaster!

Im a noob in all this. I just finished paying off my car (YAY!!) so Im planning on concentrating my funds to pay off my CC and then my student loan. When I found out he might file for BK, my mind went into overload. Now im reading the forums to get a grasp of how this works and am planning on purchasing my FICO score/ credit report to see how its all holding up.

Ah, so many questions, so little time. Hehe!

[SoulMaster]

No worries, and welcome to the forums!

-SM

[IOBA]

Ask your co-signer to WAIT to file BK unti you can things resolved with cc!

1.  Call cc and ask them to remove the other person from the card.  Pray that they will.  Otherwise what happens is when the other person files for BK, the credit report is pulled and pretty much everyong gets the BK letter.   Then the ccc  would put that notatin on the cc.

2.  See if you can qualify on your own to have that cc.  

Which cc is it?

[Anonymous]

The CC is from a Puerto Rico bank (Banco Popular VISA). I paid off a 12K loan in 08/11 and  $27K car loan in 12/11. I only have one CC (that was co-signed) and my student loan. I had thought for a while to do a certian scenario but im not sure if it would work:

Get a CC with 0% APR on transfered balances, transfer the balance from CC A to CC B, then cancel CC A. I know that I will most likely lose a huge chunk of points since Ive had the card since 09/2005 but It garentees that I wont have any problems in case of a BK from the co-signer.

So, is it really possible to ask the bank to re-qualify for the same CC and take off the co-signer? And if so.....would I lose years off the credit history since it would essentially be a new card? Or would it be the same? 

[IOBA]

My suggestion is to call the bank and ask.

Ask if you can take the co-signer off of the card immediately.

Even if the card is closed, it will remain on the CR and factor into your AAofA account.   I am not familar with the issuing bank, so I am not sure if they would back date things if you had opened up a new card.   Ask them.  

And please talk to your co-signer.  Ask the person to wait until you have a chance to clear this up with the bank BEFORE they file for BK.  

[Anonymous]

Since I recently bought my credit reports I was able to go to the bank and explain the situation. When the associate checked the computer to see if they could take the co-signer off the card, they told me that theres no co-signer with my CC. Turns out I had refinanced my CC in 2007 and had taken him off. Seems that I had completly forgotten about it. Whoohoo!!   Thats the good news. The bad news is that when they checked my credit report, it shows that I have 3 "OPEN" cards with the bank when in reality I only have one. The associate was kind enough to initiate an investigation for me to see if it can be solved. 

It should take from 30-60 buisiness days but hopefully if they fix that information it wont look like I have a $20K being used when in reality I only have $4900 being used.

[IOBA]

That's great news!!!