Do I really need to file bankruptcy?

[minnesotakent]

Minnesota

My wife and I had planned on filing bankruptcy soon. Just to make sure we had every debt listed we ordered copies of our credit reports.

After getting copies of our credit reports we discovered that the vast majority of our debt is listed only on her credit report.

There are many credit cards that are listed on her credit report, but not on mine. The accounts were in her name only, but I was an authorized user on most of the credit cards and I also used them (she requested cards in my name after opening the accounts).

Would it be best for her to file alone? If she did file alone, would the credit card companies come after me since I was an authorized user?

[bigun]

An AU has no liability. If they try and collect, you'll be able to sue the bejeezus out of them. That stunt recently cost MBNA $90K.

[url]http://caselaw.lp.findlaw.com/data2/circs/4th/031235p.pdf[/url]


Johnson v. MBNA America Bank, NA
On 2/11/04, the 4th Circuit Court of Appeals handed down its decision in this appeal, affirming a judgment entered against MBNA following a jury verdict in favor of plaintiff Johnson on a claim that MBNA violated the Fair Credit Reporting Act by failing to conduct a reasonable investigation of plaintiff's dispute concerning an MBNA account appearing on her credit report. MBNA's first contention was that the district court made an error when it ruled furnishers of credit information must perform a "reasonable" investigation of consumer disputes. MBNA, in essence, says there isn't a qualitiative component to the investigation provision that would allow a court or jury to assess whether the creditor's investigation was reasonable. The Court went back to the plain meaning of the term "investigation" and concluded it would make little sense to believe that Congress would use the term "investigation" to include superficial, unreasonable inquiries. The court therefore held that creditors must indeed conduct a "reasonable" investigation of their records after receiving notice of a consumer dispute from a credit reporting agency. The next issue, then, was whether the jury's determination that MBNA did not conduct a reasonable investigation was supported by the evidence. The Court looks at the steps MBNA took and finds that a jury could reasonably conclude that MBNA acted unreasonably. Although the disputed credit account was for $17,000, the jury found that Johnson's actual damages stemming from the incorrect information furnished by MBNA totaled $90,300. After finding that MBNA had negligently failed to comply with the FCRA, the jury awarded Johnson $90,300 and that verdict was upheld on appeal. There are many other issues discussed. Read the Court's opinion for complete details.

If you're sure you have no responsibility, don't file. No need screwing up your credit. Hang on to those reports that show the debt is your wife's until the end of time.

[AttorneyOney]

There can be advantages to filing jointly regardless of whether both of you are technically responsible for all the debts. These include an effective doubling of most exemptions and a discharge of all joint and sole debts of either spouse. The main disadvantage is that your non-exempt assets would come into the estate. There can be other issues too. For example, it would pointless to file a joint c. 7 if you got a c. 7 discharge in a case filed within the past 6 years.

The Johnson case involved, IIRC, separated or divorced spouses. One of the spouses was trying to escape from liability for the expenditures of the other on a credit card that both were technically authorized to use but which had been procured without the victim spouse's knowledge. Your facts are greatly different from that.