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joint account, her bankruptcy, my charge off?


ohsnap
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Hi I'm new to the board, thank you for this great wealth of information. I've searched around this forum but couldnt find the answers I was looking for. So here goes my situation...

I am recently divorce and my exwife filed for bankruptcy a few years ago and we had a joint account on a discover card. Neither one of us realized that I was listed as a joint card holder so when I checked my credit report, there was a huge red charge off mark, about 10k. Her lawyer said that I wasnt on her petition so there's nothing he can do. Since she completed her bankruptcy, only my name appears on this account with the charge off in my credit report.

I know I did not ever use this card. The collection agencies have tried to collect but nothing went beyond my verification letter.

Now it's been about 2 years since the last collection attempt. My credit score on equifax is 718, I havent checked the others. I pay off my CC every month and have no other debts.

I am interested in buying a home next year and I've kinda read that with a credit score of 718, I'll get a good rate but what do I know... I'm a first time home buyer.

I would like to know if I dispute this, how much crazy collection creditor hassle am I looking at? Can the credit card company make me pay for this now if I reopen this case? And does anyone think it is possible to get this charge off, off my CR? Should I even open this can of worms?

Any suggestions would be great,

thanks.

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"...joint account...discover card..."

This means you have liability for the account.

"...exwife filed for bankruptcy..."

That means her liability was discharged by bankruptcy, leaving you 100% legally liable.

"...I did not ever use this card..."

Doesn't matter at all. See above.

"...about 10k...interested in buying a home..."

That size balance on a defaulted account and a new home titled to you would almost certainly get you sued. You need to deal with this prior to obtaining a mortgage loan.

"...Can the credit card company make me pay..."

They can try and probably will by suing you. To their mind (business policies) if you have enough money to purchase a home, you have enough to pay a defaulted debt.

You could start with the DV process, disputing any inaccuracies with the CRA's and aim to settle if nothing works. Save up money. The larger the sum you have to offer, the better your chance of settling (and possibly gaining deletion).

"...2 years since the last collection attempt..."

What matters is when the TL was last reported. THAT date (combined with derogatory notations) is what causes deductions to your score. Disputing can sometimes cause an update. If this TL hasn't been updated recently, you may wish to "lay low" and pay this off at closing (which will preserve your score). Either way, you will need a chunk of $.

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oh snap! I'm liable!

Thanks for the info Ahntara. I was hoping this would just go away. It's just unfair, I guess that's the way it goes when you dont watch your finances carfully.

I just checked my credit report and the last update was 12/06.

So just to be clear, they will somehow see when I buy a house and will come after me? May not be a great idea to try to settle after the house buying since they can see how much money I am spending on a house. right?

I think I will try to find a lawyer to help guide me through the dispute process and help negotiate the amount. Would you have any idea how much is enough to settle?

Thanks.

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"...last update 12/06..."

Because this derog TL has been updated within the last 12 mos, it is already causing a large deduction to your score. So, disputing isn't going to hurt your situation and is where you want to start. Read up on the DV process and how to dispute with the CRA's. You just may get lucky and get this removed.

"...they will somehow see when I buy a house..."

They will see the inquiries relating to the loan.

"...they can see how much money I am spending on a house..."

No. They can only see what is on your CR, the loan amount and various inquiries. That's not a reason to wait to settle. You DO want to wait for the results of DV/dispute (just in case). It's also a good idea to find a mortgage broker/banker or lender. Finding a specific lender will tell you when to settle. Hint: If you qualify for conventional/conforming financing, it may be better to pay this at closing.

Research much, much more before you try settling. You want as much knowledge as you can gather. In the meantime, save, save, save. Money overcomes a lot. Good luck!

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Ok, just because Discover lists you as joint on the account may not mean you actually ARE on that account. Do you remember EVER signing the application ?? Have you asked Discover to produce YOUR SIGNATURE on this account ?

It is not at all unusual for accounts to be reported as joint when they actually are NOT joint in reality. I would go after strict proof that you were, in fact, joint from the beginning. MBNA has not been above changing someone from authorized user to 'joint' as it suited them and they lost a big lawsuit for doing just that. Other credit cards have tried similar tactics.

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Hi LadynRed,

I cannot believe they can get away with making joint card status.

Funny you brought this up because the first thing I thought was I dont remember ever signing anything for this card?

I guess with the suggestion of Ahntara, I will research and start DV process. From there I will press Discover to show me the application. Would this be the right course?

Thanks.

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Here's the case Ladynred referenced.

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.

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