| Author |
Previous Topic | Next Topic |
|
ski2313
763 Posts |
 Posted - 05/20/2008 : 09:22:02 AM
|
I had an inquiry about a new home purchase this morning. The guy makes $50k year, has less than $2k in credit card debt, and a small down payment. I pulled his credit, and it was a 602 mid. It looks to be a fairly easy FHA loan, good ratios, 13 years on job, etc..
The reason his score is so low is that there is a chargeoff of $1950 that's about 4 years old, and still currently reporting. His now ex-girlfriend put him on one of her accounts as an authorized user, but he never received the actual card, and never used the account. She has since moved to Texas and filed BK.
Can the credit card company come after him for that debt? Is he liable? This is in WI..
|
|
twobig
299 Posts |
Posted - 05/20/2008 : 09:35:39 AM
|
| Has he called and asked to be removed as an AU from this card? WI is a community property state but that only applies to married couples. |
|
|
khoiey
1709 Posts |
Posted - 05/20/2008 : 09:49:49 AM
|
That's a shame and a mess. You are still responsible for any AU on your account and vice versa. Just tell him to settle it for less or call up the Ex.
quote:
Originally posted by ski2313
I had an inquiry about a new home purchase this morning. The guy makes $50k year, has less than $2k in credit card debt, and a small down payment. I pulled his credit, and it was a 602 mid. It looks to be a fairly easy FHA loan, good ratios, 13 years on job, etc..
The reason his score is so low is that there is a chargeoff of $1950 that's about 4 years old, and still currently reporting. His now ex-girlfriend put him on one of her accounts as an authorized user, but he never received the actual card, and never used the account. She has since moved to Texas and filed BK.
Can the credit card company come after him for that debt? Is he liable? This is in WI..
|
|
|
Originate_This
388 Posts |
Posted - 05/20/2008 : 09:54:57 AM
|
Being an authorized user has both advantages and disadvantages. The good news is that authorized users have no legal or contractual obligation to repay that debt. That responsiblity lies with the one who applied for the card.
The bad news is that if that card doesn't get paid, then the negative payment history will show up on the authorized users credit depending on the credit card company's policy as they have a choice whether to report anything. Most report.
The authorized user is also guilty by association when it comes to collections and BK. Many collection agencies go after whoever is associated with that card.
Your client will need to dispute with the credit bureaus and could take awhile. |
|
|
ski2313
763 Posts |
Posted - 05/20/2008 : 10:00:48 AM
|
quote:
Originally posted by Originate_This
Being an authorized user has both advantages and disadvantages. The good news is that authorized users have no legal or contractual obligation to repay that debt. That responsiblity lies with the one who applied for the card.
The bad news is that if that card doesn't get paid, then the negative payment history will show up on the authorized users credit depending on the credit card company's policy as they have a choice whether to report anything. Most report.
The authorized user is also guilty by association when it comes to collections and BK. Many collection agencies go after whoever is associated with that card.
Your client will need to dispute with the credit bureaus and could take awhile.
So if the debt is not his responsibility, and the girlfriend has filed BK, there is technically no debt, correct?
|
|
|
khoiey
1709 Posts |
Posted - 05/20/2008 : 10:02:52 AM
|
True. But you would need proof as authorized user and a letter of Explanation if you run with FHA. Give that a shot.
quote:
Originally posted by ski2313
quote:
Originally posted by Originate_This
Being an authorized user has both advantages and disadvantages. The good news is that authorized users have no legal or contractual obligation to repay that debt. That responsiblity lies with the one who applied for the card.
The bad news is that if that card doesn't get paid, then the negative payment history will show up on the authorized users credit depending on the credit card company's policy as they have a choice whether to report anything. Most report.
The authorized user is also guilty by association when it comes to collections and BK. Many collection agencies go after whoever is associated with that card.
Your client will need to dispute with the credit bureaus and could take awhile.
So if the debt is not his responsibility, and the girlfriend has filed BK, there is technically no debt, correct?
|
|
|
Originate_This
388 Posts |
Posted - 05/20/2008 : 10:11:10 AM
|
quote:
Originally posted by ski2313
quote:
Originally posted by Originate_This
Being an authorized user has both advantages and disadvantages. The good news is that authorized users have no legal or contractual obligation to repay that debt. That responsiblity lies with the one who applied for the card.
The bad news is that if that card doesn't get paid, then the negative payment history will show up on the authorized users credit depending on the credit card company's policy as they have a choice whether to report anything. Most report.
The authorized user is also guilty by association when it comes to collections and BK. Many collection agencies go after whoever is associated with that card.
Your client will need to dispute with the credit bureaus and could take awhile.
So if the debt is not his responsibility, and the girlfriend has filed BK, there is technically no debt, correct?
Well, it depends on the type of BK she filed to determine is the debt needs to be repaid or not. But regardless if it was or not, he's not liable for it simply because the AU and credit card company never had a contract with each other for repayment, that exists between the cardholder and the CC company.
|
|
|
CindyJo440
126 Posts |
Posted - 05/20/2008 : 10:49:22 AM
|
| Have him contact the credit card company and request that they delete this from his credit file as he was only an authorized user. I have had several borrowers do this and so far there has not been any problem with the credit card company removing the information. |
|
|
rtrefflich
3935 Posts |
Posted - 05/20/2008 : 11:09:19 AM
|
How long does ths take? Will the CC company let you talk on their behalf since you are an AU?
quote:
Originally posted by CindyJo440
Have him contact the credit card company and request that they delete this from his credit file as he was only an authorized user. I have had several borrowers do this and so far there has not been any problem with the credit card company removing the information.
|
|
|
CindyJo440
126 Posts |
Posted - 05/20/2008 : 11:37:00 AM
|
| In case it has only taken a couple of days for them to send out a letter to each bureau removing the account. I make sure the borrower also requests a copy of the letter be sent to them. |
|
|
| |
Previous Topic | Next Topic |
|
Search for: 
