Filing BK - Mother joint on a/c - HELP!

[Shrike1070]

What is the name of your state?What is the name of your state? CO

Hello,

I will be filing BK Ch7 on July 13th. I pulled my credit reports in anticipation of filling out the schedule of creditors and found to my surprise that my mother is listed as co-responsible on an old line of credit I had for overdraft protection on a now closed checking account. My mother helped me start the checking account about 20 years ago when I was 17 years old and a minor.

When I closed the checking account several years ago, I still owed a balance on the line of credit. Up until about 60 days ago, I continued to pay on this account, but when I decided I needed to file BK I stopped paying. The balance still due is $350. I thought that I could include this in the BK, but now with finding out my mother is on it, I am not sure what to do.

Should I try to pay off the $350 before filing? Or would this be viewed as a preferential payment? Or should I re-affirm the account at the 341?

I don't want my mother to be hurt by my bad financial decisions. Help!

[Ladynred]

Should I try to pay off the $350 before filing? Or would this be viewed as a preferential payment? Or should I re-affirm the account at the 341?

Yes, it could very well be seen as preferential. No way you should reaffirm something like this and the judge may not allow it anyway.

Can your mother pay this thing temporarily ? You can always square up with her later. YOUR bankruptcy should NOT wind up on her reports.. she isn't the one filing for BK and she could easily dispute it off anyway.

[Shrike1070]

Lady in Red,

When you say, "can your mother pay this thing temporarily?". Do you mean that my mother should make the minimum monthly payment to maintain the account? I thought that all outstanding creditors are automatically included in a BK even if you are on time with them. Or am I mistaken?

What if I paid the monthly minimum in cash (about $15 per month) through the BK? Would the trustee even know who was making the payment if I did this?

[Ladynred]

Yes you must include all creditors, but since your mother is on the account, the creditor will look to her for payment when you file for bankruptcy. The Trustee isn't going to question this, happens all the time. So, if she can keep the account current, you can pay her back and the account off later on.