Running out work for a prolonged time is among the leading reasons a person files for bankruptcy. (The others are divorce and unsettled medical bills). If you used your credit card to survive while you were out of job, it’s virtually impossible to deal with that particular debt without some help.
One of the main questions people ask during the bankruptcy process is about keeping credit cards. But bankruptcy isn’t really a pick and choose proposal. Bankruptcy is based upon a concept of fairness. All your lenders are to be treated equally. It would not be reasonable for you to discharge one debt and maintain the other.
Moreover, it is essential to list all your creditors, even if the account had a zero balance. Any active account, even if it has a zero balance, that matches up to a bankruptcy case will lose its borrowing privileges immediately.
It is also worth keeping in mind, although this could seem noticeable, that any kind of accounts you fail to list in your bankruptcy documentation will certainly not be discharged. To be entitled for discharge, the creditor must have been provided the notice of bankruptcy. So, you cannot give any incorrect information that would make it difficult to identify your account.
A lot of courts have also held that you can not discharge those accounts in a future bankruptcy. Consequently, you will be liable for settlement until the statute of limitation runs, if you run up a balance on those accounts.
Company Credit Card
If the company has given you a credit card to cover your travel or any working expenses, you also need to include this in your bankruptcy list, but only if you are liable to the lender on the balance.
The person which is liable is not always necessary to be the one who pays the bill. Thus, company credit cards are typically divided into 3 categories.
– The regular monthly statement goes directly to the employer, as well as the company is in charge of paying the bill.
– The regular monthly statement goes to the worker, who is responsible for settlement of the account, after that seeks reimbursement from the employer.
– A mix of both. The statement generally goes directly to the employer, yet the employee will compensate the company any type of personal expenses it sustains.
To Disclose or Not to Disclose?
When you file for bankruptcy, you must list that card if you have any personal obligation on it whatsoever. In situation when company takes the whole resposibility for it, and also you have no obligation for the account, you ought not to list the card.
If you’re not sure whether you’re responsible for settlement, your HR department should figure it out. However this may clue you in: if your employer did nothing greater than hand you a card (also one with your name on it) and also tell you exactly what you can purchase with it, it’s most likely a company released card that carries no individual liability. If you needed to submit an application for this card in the same way you did when dealing with your various other individual cards, then most likely you are liable and need to list that debt in your bankruptcy.
If you list this card on your bankruptcy, the loan provider will close the account when discovers it. Yet the creditor will still expect payment from the co-borrower– your employer– if there’s a balance on the account.
Bankruptcy is a complicated process, yet it can make your life easier. It includes many different aspect and being precise is essential when it comes to bankruptcy. It is easy to get confused when dealing with it on your own. That’s why, legal guidance should not be underrestimated. James “Jack” Setters has more than 20 years of experience preparing and filing thousands of Chapter 7 and Chapter 13 petitions. For the best personalized legal services available today give us a call.