topic Re: Authorized User and Bankruptcy in General Credit Topics

Authorized User and Bankruptcy

Iusedtolurk — Sun, 21 Jul 2024 21:05:39 GMT

My daughter due to some unfortunate situations (loss of job, car accident no insurance, hospital stay etc) has ended up in a world of debt (charge offs, collections etc) her only recourse out of this is filing Bankruptcy for a fresh start, she's young 23 years old.

She is an Authorized User on 2 of my accounts.

I was wondering before she files should I remove her as an authorized user (don't want any unforseen blowback? from my accounts getting caught up in her bankruptcy) or should I leave her on which will help her out once the smoke clears from the bankruptcy.

Anyone having any experience with this I appreciate your feedback. Thanks

Re: Authorized User and Bankruptcy

JoeRockhead — Sun, 21 Jul 2024 23:42:55 GMT

I dont forsee any kind of repercussions for you. Depending on the issuer, they may remove her on their own once the BK is reported.

Re: Authorized User and Bankruptcy

IsambardPrince — Mon, 22 Jul 2024 08:35:03 GMT

@JoeRockhead wrote:
I dont forsee any kind of repercussions for you. Depending on the issuer, they may remove her on their own once the BK is reported.

My spouse added me as an authorized user to his Capital One Walmart shortly after I filed.

At least to Capital One, my bankruptcy didn't affect my Authorized User status, even though I was filing bankruptcy on over $100,000 in assorted mess, including ~$30,000 to Capital One.

So not only did the bankruptcy not interfere with it, Capital One didn't do anything either. Also, nothing about my bankruptcy ended up on his report.

You can be an Authorized User on someone else's card before, during, and after the bankruptcy. It's their account, not yours. Bankruptcy affects your (the bankrupt person's) credit and credit in your (the bankrupt's) name.

Also, if your AU isn't managing their cards so well, you should probably assess whether they should have an AU card from you, but that's a different issue. You know them best.

Re: Authorized User and Bankruptcy

titancylinder — Sun, 04 Aug 2024 05:11:45 GMT

@Iusedtolurk wrote:
My daughter due to some unfortunate situations (loss of job, car accident no insurance, hospital stay etc) has ended up in a world of debt (charge offs, collections etc) her only recourse out of this is filing Bankruptcy for a fresh start, she's young 23 years old.

She is an Authorized User on 2 of my accounts.

I was wondering before she files should I remove her as an authorized user (don't want any unforseen blowback? from my accounts getting caught up in her bankruptcy) or should I leave her on which will help her out once the smoke clears from the bankruptcy.

Anyone having any experience with this I appreciate your feedback. Thanks

The AU account will typically survive the BK based on my experience.

I was (still am on the chase account) an AU on my fathers Wells Fargo and Chase Cards and both survived when I declared in 2016 due to monumental medical debt.

No need to remove your daughter from the account. You won't be affected.

Re: Authorized User and Bankruptcy

JoeRockhead — Mon, 05 Aug 2024 11:13:47 GMT

@davidbland889 wrote:
Hello,
Authorized Users and Bankruptcy:
An authorized user is someone who can use another person’s credit card but isn’t financially responsible for payments. They can charge on the card without being liable for the debt.
If your daughter files for bankruptcy, it won’t impact your credit card account as the authorized user. Filing bankruptcy doesn’t affect the account holder’s credit report since authorized users don’t share credit reports with the account holder.
Therefore, you can leave her as an authorized user without worrying about any negative consequences for your account.
Joint Account Holders:
Unlike authorized users, joint account holders share full responsibility for the credit card account. Both are jointly liable for the debt.
If your daughter were a joint account holder, her bankruptcy would not make her liable for the debt, but you would still remain responsible.
Keep in mind that credit card companies might choose to close the entire account when a joint account holder files for bankruptcy.
Options:
If you’re concerned about how the joint account holder (you) will be impacted, consider these options:
Call Your Credit Card Company: Reach out to the credit card company and ask if you can be removed from the account before your daughter files for bankruptcy. REDACTED
Close the Account: If there’s no balance or if the joint account holder wants to pay off the balance before the bankruptcy filing, you can close the account.
Best Regards

@davidbland889 Aside from your response sounding like it was generated with AI, the placement of the the link for finacial services (which flags as a scam) you included is a violation of the TOS here.

Re: Authorized User and Bankruptcy

MyAZLawyers — Tue, 11 Feb 2025 02:14:55 GMT

Generally, when someone files for bankruptcy, their debts are discharged, but authorized user accounts don’t automatically become part of that process. If she’s listed as an authorized user on your accounts, the accounts themselves are usually unaffected by her bankruptcy, but her credit score might be impacted based on whether the accounts have been paid on time or have any outstanding balances. If you’re concerned about potential complications, it might be a good idea to remove her as an authorized user before she files for bankruptcy. This way, your accounts are less likely to be associated with her bankruptcy and could help you avoid any potential confusion.

Re: Authorized User and Bankruptcy

Pppoolboy — Tue, 11 Feb 2025 17:05:36 GMT

I've done a few hundred Chapter 7 bankrupties in my career and always suggest that people who are declaring bankruptcy sever financial ties with others to the greatest extent possible before doing so. Chapter 7 trustees are some of the greediest and most corrupt people I've ever encountered and, if you can avoid them poking their noses into your business, so much the better.

Re: Authorized User and Bankruptcy

Barky — Wed, 12 Feb 2025 03:24:47 GMT

@Pppoolboy wrote:
I've done a few hundred Chapter 7 bankrupties in my career and always suggest that people who are declaring bankruptcy sever financial ties with others to the greatest extent possible before doing so. Chapter 7 trustees are some of the greediest and most corrupt people I've ever encountered and, if you can avoid them poking their noses into your business, so much the better.

Agreed. The gen zeroes might not want to hear it but it's true.

Re: Authorized User and Bankruptcy

Realist — Wed, 12 Feb 2025 11:26:26 GMT

Severe all ties before the event.