Family credit card debt |
Credit Cards in Family or When it's Best to File Bankruptcy
When a couple decides to marry, there inevitably arises a question "Should I have a joint with my spouse credit card account or would it be wiser to preserve the current credit line or apply for new credit card in my name only?" And while your happiness seems to be eternal at the moment, leaving this question without a solution may have a painful effect on your conjugal life later on.
Not infrequently improper credit card management of one of the spouses or both brings about a bankruptcy threatening situation and when there is nothing left but to file, you face a number of perplexing questions.
The most frequently asked question of late is whether a spouse can file for bankruptcy alone - without the other - and what effect it will have on his credit report and credit score. This question is more interesting than difficult and the answer is different in every particular situation.
To be more exact, there may be several solutions for each single case and the most important thing is to determine which is of more advantage to you.
Most confusion turns up in case you have a joint with your spouse bank account and you have made an unmanageable credit card debt. For some reason you want to file alone or your spouse refuses to join you in the petition, but do not make haste - the favorable outcome of this idea depends on a number of factors to consider.
If at the moment you are weighing the pros and cons of filing together or alone you should arrange a consultation with a lawyer who will give you professional advice based on his knowledge of the local bankruptcy jurisdiction, the status of your marriage, the nature of your debts, your income source and a number of other things.
Anyway, the lawyer's general answer will be "Yes", with some specifications, though.
Imagine you have a joint with your spouse credit card account with some of the MasterCard credit products. You made the application for the card together, so both your names are on the account.
Now, if one of you files for bankruptcy, it doesn't mean that the debt made in the name of your spouse is also eliminated. No, your husband or wife is still responsible for their part of charges, and as there is often sort of confusion as to which bill is whose, the whole process drags on. That's why it is sometimes important to have separate credit card accounts so as to avoid filing if you don't want to.
Then, if you plan to file individually, ask yourself whether it is really to your advantage at the moment. You may use bankruptcy as a delaying factor if you are facing, let's say, a mortgage foreclosure. But if the judge gets at the roots of things and exposes your trick, you will make "bad faith" and will be lose the right to refile another bankruptcy when you really need it.
But good thing about this is exactly that your spouse didn't file! Thus when you are not allowed to refile bankruptcy to save more time, your husband or wife can do it. Then, your family has another month grace period to find money for the necessary mortgage payment and save your home.
So, you see that there are a number of nuances about filing individually. You are strongly recommended to consult your lawyer before venturing upon this.
Brian McCall
March 14, 2009, 12:04 am
My question is as follows: 1st was this a bad move for me to contact them and give them someone other than my daughter to make good on the balance since they never contacted me to begin with. next can they sell the balance due, to some other collection agency and then can that agency start over and come after me or my dau
After the credit card company sold your daughter’s account to the collection agency, the agency became its legal owner and can now sell it to any other agency without asking your permission, until you or your daughter does whatever is necessary to settle the account. However, once the account is settled, then the collection agency that you made the settlement agreement with cannot subsequently resell the balance due to another collection agency because presumably you agreed to pay a reduced amount to settle the account with them “in full”.
Furthermore, a collection agency is prohibited by law from collecting any amount more than what you actually owe. A collection agency must also tell you in writing how much you owe and notify you of any fees that have been added by them, such as collection fees, interest, and court costs. So, if a collector comes after you or your daughter after the account has been settled, be aware that you’re protected by the Fair Debt Collection Practices Act.
Finally, before you sign a contract with your collection agency and agree to pay them the amount due or to make payments toward the balance, be sure to check the legitimacy of the agency and review the contract carefully to make sure you agree to its terms. The agency must provide you with its name, address and the company that sold your debt to them. Then, if you are satisfied with their response and the contract and start to make payments, call one of the three major credit bureaus to make sure that your payments are being reported so that your credit record will reflect the settlement. Unfortunately, we cannot give you a more in depth consultation, so just contact the collection agency’s customer service department or visit their website for more information.
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