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Are you considering filing for bankruptcy in Memphis? It is important that you understand all your options regarding bankruptcy and alternatives to bankruptcy, as well as which one would be the best fit in your situation. A well-informed decision is of great importance for ensuring the smooth proceeding of the bankruptcy process. The following article is provided by our Memphis Bankruptcy Attorney. |
Will my personal bankruptcy in Memphis affect a supplementary card holder?
Here’s a story about personal bankruptcy in Memphis, based on a real life situation (it is a common scenario in Memphis, Tennessee):
One spouse, let’s say the wife, applied for a credit card, and when asked "would you like a card for your husband?" she answered "yes". The wife and husband then each have a credit card on the same account. Both cards have the same account number.
What happens if the primary card holder (the person who originally applied for the card, in this case the wife) files for personal bankruptcy in Memphis? Is the supplementary card holder liable?
The answer is usually yes.
To see this for yourself, take a look at one of the “pre-approved” credit card applications that you probably received in your mailbox every week. The application already has your name pre-printed on it. All you have to do is sign it, and you are pre-approved for a new credit card. In smaller print, at the bottom of the application, is a space for you to write in the name of a supplementary card holder. If that person, such as your spouse, also signs the application, they get a credit card on your account.
Here’s the catch: The fine print on the back of the application says something like:
The card holder agrees “that the basic card holder will be liable for all charges incurred with the cards issued to the basic card holder and any supplementary card holders.”
In addition, the card holders “agree that each supplementary card holder will be liable jointly and severally with the basic card holder for all charges incurred with the supplementary card issued to him/her.”
This means that the primary card holder, the wife in our example, is responsible for all charges: hers and her husband's; therefore, if the wife files for bankruptcy in Memphis, it will affect her husband too. Also, at the very least, the supplementary card holder, the husband in this example, is responsible for all the charges charged to his supplementary card.
We find that in real life it is often difficult for the credit card company to determine what charges were charged by someone on the card many months or years ago, so if one party does go bankrupt, the other party is usually held responsible.
The only time this may not apply would be if the supplementary card holders never applied for the card, never signed for the card, and never used the card. In that case, they may have a chance of proving they are not responsible for the charges (but don’t count on it).
The moral of the story is this: credit cards can be dangerous, so be careful when applying for a supplementary card. You may be better off keeping your debts separate.
If you find yourself in this situation and are considering bankruptcy in Memphis, you should consult a Memphis bankruptcy attorney to fully review your options, and determine which one makes sense for you.
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