One of the major reasons to file for bankruptcy is credit card debts and it is understandable if you don’t want your employer to know about it. It all depends on the type of account you have and the employer’s policies.
Types of corporate credit card accounts-
If it is for travel expenses or for buying supplies then it might be one of these
- An authorized user account
- An obligor account.
The type of account will help you to know whether or not you should keep using it and if you should list it on the bankruptcy papers.
If you are an authorized user-
Here the account is in the name of the employer and you are only listed as an authorized user then it is not necessary for you to list it as it is not in your name. It is mainly issued for business-related expenses and repaid by the company itself.
If you owe the company for the personal charges issued from the account then the employer is shown as a creditor and he/she will be notified of your case.
If you are an obligor on the account-
It means that you are liable for paying the balance. You have this account if you receive bills directly from the credit card company, responsible for paying the balance each month and you get reimbursements from your employer for business expenses.
Both you and the employer are responsible for the debt and if you have no balance in it then you might be able to keep it of your bankruptcy filing but in some cases, the company keeps checking its client’s financial status and close the account. And if you have a balance then you will have to add it to your list but it might be discharged if you file under chapter 7.
If you cannot use corporate credit cards what should you do?
Here are some alternatives-
- Ask your supervisor for an alternative or human resources. If they issue regular credit cards then they might have an alternative to the traditional way.
- Ask your supervisor to make you an authorized user rather than an obligor in an account.
- A separate account where your employer can reimburse your expense or make an advance payment.
- Apply for a secured credit card, here you have to make advance payments to the same amount that you want in your credit cards. It helps in building your credit score as well as having companies build trust that you can repay but have higher interest rates than the normal credit cards.
Special considerations in chapter 13 bankruptcy-
In chapter 13 you cannot take additional debts without the bankruptcy court’s permission.
Normally, your chapter 13 bankruptcy trustee will have a policy against incurring debts while a case is going on. It focuses on debtors who have corporate credit cards where they make advance business payments and waits for reimbursements.