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  1. #1
    Join Date
    Feb 2013
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    5

    Default Effect of Spouse's Bankruptcy on a Joint Credit Card, Zero Balance

    My question involves bankruptcy in the state of: OH

    My husband will be filing for bankruptcy on his own. We have only one card that we own jointly that was for some furniture that we purchased. We have since paid that balance and the card is at a zero balance and it has a very low credit limit.

    How will this possibly affect me? Because it is a zero balance, his lawyer doesn't even include it in the filing, but he did say that any of his credit cards that currently carry a zero balance will most likely get closed once they catch wind of the filing. I am not overly concerned about this one low credit limit card getting closed as we will most likely never use it again, but I am very concerned about if it will affect me in any way. What I am really afraid of is if they note on the account that it was closed due to bankruptcy and if that could show up on my credit report.

    I have my own credit accounts which are all in good standing, balances paid off every month, so the thought that this one account could scare my creditors makes me very nervous.

  2. #2
    Join Date
    Mar 2013
    Posts
    18,340

    Default Re: Joint Credit Card with Zero Balance

    You are right to be concerned.

    If the CC company closes the account due to bankruptcy it will show up on your credit report. That'll lower your credit score and give your other CC companies the opportunity to raise your interest rates or cancel your cards.

    I suggest you cancel that joint card now, before your husband files, so that it appears on the credit reports as closed by customer's request.

    Unfortunately, if you have a joint mortgage on your home, that mortgage could also have a negative entry on both your credit reports, leading to the same results.

    Face it.

    You are both in a boat.

    It only takes one of you to poke a hole in the bottom of the boat, and you both sink.

    That's the unintended consequence of a one spouse bankruptcy.

  3. #3
    Join Date
    Jan 2006
    Posts
    38,867

    Default Re: Joint Credit Card with Zero Balance

    if there is a $0 balance, why not just close the account yourself before they have a chance to close it for you? After all, there is a good chance it is going to be closed anyway so you would lose any benefit of the account that you think you have now.

  4. #4
    Join Date
    Feb 2013
    Posts
    5

    Default Re: Joint Credit Card with Zero Balance

    Thanks for the replies.

    Ok, I do think I will go ahead and close the account.

    As for our mortgage, our lawyer told us that because it is joint, the bank would not close that account and I would be the only one responsible for it (I have always paid the mortgage and utilities, so this is not even an issue for us). We will be keeping our home as it has very little equity and is easily exempted. He assured me that the mortgage would not be a problem on my credit report. I don't believe that the lawyer is going to suggest that my husband reaffirm the mortgage and I am OK with that since the mortgage account is also still in my name anyway. Am I wrong is assumption?

  5. #5
    Join Date
    Oct 2006
    Posts
    16,474

    Default Re: Joint Credit Card with Zero Balance

    Quote Quoting slc
    View Post
    My question involves bankruptcy in the state of: OH

    My husband will be filing for bankruptcy on his own. We have only one card that we own jointly that was for some furniture that we purchased. We have since paid that balance and the card is at a zero balance and it has a very low credit limit.

    How will this possibly affect me? Because it is a zero balance, his lawyer doesn't even include it in the filing, but he did say that any of his credit cards that currently carry a zero balance will most likely get closed once they catch wind of the filing. I am not overly concerned about this one low credit limit card getting closed as we will most likely never use it again, but I am very concerned about if it will affect me in any way. What I am really afraid of is if they note on the account that it was closed due to bankruptcy and if that could show up on my credit report.

    I have my own credit accounts which are all in good standing, balances paid off every month, so the thought that this one account could scare my creditors makes me very nervous.
    Just call and close the account yourself. Your credit score won't be dinged for an account you closed.

    - - - Updated - - -

    Quote Quoting slc
    View Post
    Thanks for the replies.

    Ok, I do think I will go ahead and close the account.

    As for our mortgage, our lawyer told us that because it is joint, the bank would not close that account and I would be the only one responsible for it (I have always paid the mortgage and utilities, so this is not even an issue for us). We will be keeping our home as it has very little equity and is easily exempted. He assured me that the mortgage would not be a problem on my credit report. I don't believe that the lawyer is going to suggest that my husband reaffirm the mortgage and I am OK with that since the mortgage account is also still in my name anyway. Am I wrong is assumption?
    If the mortgage is never delinquent a negative cannot be posted. If you are not filing bankruptcy his bankruptcy cannot be reported on your credit report. That being said...foul ups happen and you are going to have to be vigilant in monitoring your credit report with all three companies to make sure that no negatives are reported on your credit report.

    However, DO cancel any joint accounts with zero balances yourself...preferably before he files for bankruptcy.

  6. #6
    Join Date
    Feb 2013
    Posts
    5

    Default Re: Joint Credit Card with Zero Balance

    Quote Quoting llworking
    View Post
    Just call and close the account yourself. Your credit score won't be dinged for an account you closed.

    - - - Updated - - -



    If the mortgage is never delinquent a negative cannot be posted. If you are not filing bankruptcy his bankruptcy cannot be reported on your credit report. That being said...foul ups happen and you are going to have to be vigilant in monitoring your credit report with all three companies to make sure that no negatives are reported on your credit report.

    However, DO cancel any joint accounts with zero balances yourself...preferably before he files for bankruptcy.
    Thank you. I did call and cancel the card myself, which they did right away for me over the phone.

    I auto pay the mortgage so we are never late on it. I do plan to check my credit reports 30 or so days after his bankruptcy is discharged to make sure everything looks good.

    Thanks again for the advice.

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