Credit cards
Are supplementary card holders liable for the the primary card holders debts if the primary card holder declares bankruptcy?
The supplementary card holder did not sign any agreements at any time.
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If you make any unusual purchases on your credit cards on the “eve of bankruptcy,†there are a couple of things that typically take place. The first and most common is the creditor simply informs the trustee that this has happened and the trustee can require the bankrupt to pay equivalent monies into the trustee’s office (in addition to the required payments) and these monies will then be distributed on a pro rata basis amongst all the creditors. This is the most common route as it is much less involved from the creditors standpoint. However, in the event that the trustee fails to act or it is simply not brought to the trustee’s attention, the onus then is on the creditor, and to recover any of these monies the creditor must oppose the trustee’s discharge and bring this issue in front of the bankruptcy courts.
This depends sgnificantly on the type and size of the gift, but the worst case scenario is that you declare bankruptcy and will have to provide money to the trustee on top of the normal cost of bankruptcy that is equivallent to the value of the gift. This money will then be distributed equally to all of your creditors and you will be eligible to be discharged from all your other unsecured debt.
In a bankruptcy all creditors automatically file with the trustee a list of all transactions in the previous three months. However, if the creditor believes you have abused the credit cards, they can review transactions for at least a year in the past, and longer if warranted.
If you believe this is an issue, you should discuss this with your trustee as there are ways to deal with this type of issue.
If the supplementary cardholder’s name appears on the bill then they will definitely be held responsible for the debt.
If their name doesn’t appear on the bill, but they ever used their card then they will likely be held responsible for the debt.
If the supplementary person never signed the original application, their name doesn’t appear on the bill and they never used the card then they probably won’t be held responsible for the debt.
The best way to find out if the supplementary card holder will be held responsible for the debt is to call the credit card company and ask them whose name(s) are on the account.
As a general rule, supplementary cards are a very bad idea and should not be requested. If you receive one you should immediately contact the bank and have it cancelled. If you need a credit card, we suggest you apply for your own.