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Colorado residents: which accounts are subject to bankruptcy?

Many couples in Colorado have made a habit of combining their financial affairs. From checking accounts to credit cards and more, couples often find it more convenient to combine two financial accounts into one. When it comes to bankruptcy, however, which is an effective way to discharge credit card debt, couples should understand what happens when two or more individuals are named on a single account that is the subject of the bankruptcy.

Take, for example, the case of a person who adds a partner as an authorized user to one of the person's existing credit cards. Under this scenario, the partner obtains the ability to use the credit card, but the partner is not necessarily financially responsible for the account. In other words, in most circumstances, the responsibility for paying the credit card bill still rests with the original account holder.

If the partner files for bankruptcy, the credit card account of the person that added the partner would not be subject to the bankruptcy proceeding. This is because the only accounts that would be subject to bankruptcy would be accounts belonging to the person who filed for bankruptcy or joint accounts owned by that person and another individual. Accordingly, since the partner is not financially responsible for the account described above, that account would not be part of the bankruptcy.

At the end of the day, individuals who are thinking of filing for bankruptcy should consult a bankruptcy attorney to determine which of their accounts would be subject to the bankruptcy. Individuals should acquire this information so that they can obtain the full benefit of bankruptcy for themselves and rid themselves of the debt they carry.

Source: Fox Business, "What happens if authorized user goes bankrupt," Jane McNamara, March 24, 2014

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