Legal Question in Bankruptcy in Michigan

Re: How would my bankruptcy affect the credit of authorized users on my credit c

When your daughter became an authorized user of your account, the law states she also became legally responsible for the payments on the account. The reason for this is the credit card company doesn't know who is incurring the charges on the card. She could say you never signed any of the charge slips but that won't convince the credit card company that she didn't benefit from the purchase. The credit card company rationalizes that she could have gone shopping with you and purchased something for yourself but she signed the charge slip while you went shopping for something else.

As an authorized user, the credit card company considers her as responsible for the repayment of the debt as you. The creditor is under no obligation to notify her, as an authorized user, if the payments are not being made. The creditor puts the obligation on her to be sure the payments are being made in a timely fashion.

As for the credit card company reporting this account to the credit reporting agencies (cra's), they are reporting factual information to the cra's. They would be saying she was an authorized user on an account that was placed into bankruptcy or charged off. This derogatory notation will remain on her credit bureau file for seven years from the date of last activity on the account. This date, which is probably the date the credit card company charged-off the account, should be stated on her file and cannot be extended even if she started paying on the account.

In a few years, when she tries to buy a new home, the mortgage company will require an explanation of this account. They might even require her to payoff the account before they will grant her a loan. Although what I am saying is not what you want to hear, at least now you know how the 'system' works.

There may be other available options for both of you. Feel free to give me a call for more information. 1-888-31-SWEENEY