Account as AU Primary cardholder will file BK

[FICOADDICTED]

Hello all!!!  I'm an AU under my sister's store card - the card has no balance and in very good standing but she will file BK probably next month how that will affect my FICO score?  Does she need to remove me as AU ASAP? 

Please advise.... 

[GST2008]

It shouldn't affect your score, as it isn't officially your debt.  Most likely when she declares and they close the account, the history will just be removed completely from your report.  If you know she is going to declare BK for sure and you know when, I would just have her call and take you off as AU if it will resolve some of your anxieties around the subject.  How it will affect your fico is anybody's guess, it may raise it a little or lower it a little depending on what the rest of the items on your report look like.  The BK will not hurt you, just potentially the loss of the history from the AU account.  I recently had an AU account stop reporting to my CR and the score actually went up several points, so you never know.  Hope that helped. 

[Uniqua]

Actually, if she owes nothing to that particular creditor she doesn't need to include this CC on her schedule. There is no guarantee that the creditor won't get wind of the BK and close the account, but I wouldn't worry about that until it happens. If you are really worried about this affecting your FICO score, have her remove you as an AU before she files BK; and, if the card stays open and satisfactory, you can have her re-add you as an AU later on.

Remember, she only needs to include ALL debt outstanding and owing.

Message Edited by Uniqua on 11-09-2008 10:35 AM

[jmbfl]

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@Uniqua wrote:
Actually, if she owes nothing to that particular creditor she doesn't need to include this CC on her schedule. There is no guarantee that the creditor won't get wind of the BK and close the account, but I wouldn't worry about that until it happens. If you are really worried about this affecting your FICO score, have her remove you as an AU before she files BK; and, if the card stays open and satisfactory, you can have her re-add you as an AU later on.

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This is all true.

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@Uniqua wrote:
Remember, she only needs to include ALL debt outstanding and owing.

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This is not quite true. 

Do not include any accounts in BK that are in good standing and are either paid off or you can pay them off. You only need to include in the BK the accounts you want to. They will have their status on your CBR's changed to "Included in Bankruptcy" (IIB). Having those older accounts open will ease and speed the recovery process post BK. On the other hand if you include a paid or payable accout in the backruptcy it: 1) will be closed and 2) you may be permanently blacklisted by the issue and never be able to obtain credit from them again in the future. Consider what is included in BK very carefully. The choices made will effect your credit future!

[Uniqua]

jmbfl, you need to include ALL debt that you owe. If you have a $0 balance, you don't need to include it as clearly there is no debt. This is the reason why so many people have to amend their schedules because they either intentionally did not include or "forgot" to include debt on their schedules. I have been through this myself, not to mention I have 15+ years in legal experience/background. You MUST disclose ALL of your debt on your schedules.

[Anonymous]

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jmbfl wrote:

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@Uniqua wrote:
Remember, she only needs to include ALL debt outstanding and owing.

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This is not quite true. 

Do not include any accounts in BK that are in good standing and are either paid off or you can pay them off. You only need to include in the BK the accounts you want to.

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You're both right.  BK rules vary from state to state.  Some states do in fact require you to include all debt, as Uniqua points out.  Some states allow you to cherry pick, as jmbfl points out.

It all depends on where you're filing.