Bankruptcy Lawyer Discusses The Effect of New Jersey Bankruptcy on Credit and the Authorized User
An authorized user is permitted to use a credit card without having any obligation to pay the debt. This means that only the individuals that have signed the credit card documents, as the responsible party, may be sued if the debt is in default. An authorized user may be included at the time the responsible party signs the application or anytime thereafter, without a credit check.Typically, the responsible party and not the authorized user receives the credit card monthly statements and correspondence. Consequently, the authorized user may not be privy to the credit card information,including the status of credit card payments.
The status of the credit card will affect the Authorized users’ credit and credit score, even though he is not responsible for making payments. If the payments are current, the authorized user’s credit will be favorably effected. However, if the payments are in default, the authorized user’s credit will be negatively effected. Also, the filing of a bankruptcy case by the responsible party will negatively affect the credit score of the authorized user. Therefore, it is extremely important for the authorized user to be added to the account of a very responsible person.
The credit card company will continue to report the status of the monthly payments for the authorized user, until the authorized user is removed from the account. If the authorized user is aware, that the payments are not paid on a timely basis, he should remove himself from the account, for the purpose of stopping any future negative reporting. The authorized user should remove himself from the account, prior to the bankruptcy filing of the responsible party. As a result, the filing most likely will not be reported on the authorized users’ account.
One strategy for repairing credit after a New Jersey bankruptcy filing, is to add oneself as an authorized user, to an existing established credit card that is held by a very trusted individual. Also, one can include themselves to a new credit card as the responsible party or authorized user, with a very trusted individual.
The Law Offices of Robert Manchel may be contacted at 866 503 5644 to discuss your New Jersey bankruptcy options.