Will I be allowed to have or use somebody’s credit card?

January 30th, 2015 by Questions

Will I be allowed to have/use somebody’s credit card as an authorized user (not a cosigner!) during my bankruptcy? (Different trustees give different answers to this question, so I’m confused and also wondering who of them is less competent :)).

Posted from: Quebec


One Response to “Will I be allowed to have or use somebody’s credit card?”

January 30, 2015 at 11:13 am, Doug Stuive, CA | Trustee | CIRP said:

The reason why are you getting different answers to this questions is probably due to the fact that this is a grey area in the Bankruptcy and Insolvency Act and it probably comes down to the way you are using this credit card.

If someone has allowed you to use their credit card as an authorized user on their account there is nothing precluding you from using the card under the Bankruptcy and Insolvency Act in general terms. As an authorized user you are not required to pay the account so technically you are not continuing to use credit. However, should you be using credit because you are continue to mismanage your finances and are not living within means then you could run into a problem. The Bankruptcy Act is meant to foster rehabilitation of the debtor. If you show a continued reliance on credit, even if you are not responsible for paying that credit card, you may still be opening yourself up to an issue with obtaining your discharge from bankruptcy. Further, the bankruptcy Act does state that you cannot borrow funds up to a certain amount while bankrupt. What is the arrangement with the owner of the credit card? Are you racking up a balance that you will have to pay them back? If so then you are continuing to borrow funds during the bankruptcy and this is grounds to oppose your discharge from bankruptcy. However, perhaps you have a monthly bill that requires you to bill to a credit card, which you do not have. If you are simply billing a monthly amount to the card and then paying the credit card owner on a monthly basis for that bill then I see no issue with this use of credit.

As you can see the way you use the credit card is really the issue that will indicate whether it is allowable while in bankruptcy.

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