Losing your job-issued credit card during bankruptcy

Maybe you fear you’ll have to declare bankruptcy. You’re even playing it out in your head, trying to see how it would really go.

What about that business credit card from your employer, which you use for job-related expenses? Will they take it away from you? Does your employer even have to know about your bankruptcy?

A long of answers “depend so consider legal advice

Many scenarios can apply to company cards and, in any case, bankruptcy is a complex legal and financial issue with a lot of moving parts. And as you know, company cards are no place to improvise. If you have a company card and are thinking about bankruptcy, talking to an experienced bankruptcy attorney as early in the process as possible may make what comes next a lot easier.

Who is liable for the debt?

The liability probably goes directly to your company if the card was issued to your company which then authorized you as a user. You can usually tell if you’re personally liable without even reading the documentation you probably received (and you should read that, by the way).

For some cards, the employer pays the card, perhaps with occasional inquiries to the employee about whether this-or-that was business-related. For such cards, the business generally holds the liability for the card. But more often, the employee must log onto the card company’s website every month, pay the card with their own money, and then get reimbursed by their employer. It that’s you, you probably have liability on that card.

Why it matters to bankruptcy

People declaring bankruptcy typically must declare the cards for which they’re liable, and the credit card companies usually close those accounts. (There are exceptions, as usual.) If you own the debt on your company card and your company reimburses you, you may very well lose the ability to use your card.

If your company owns the card and you reimburse them for any non-business expenses that wind up on it, you have a better chance of being able to keep it during bankruptcy. However, credit companies talk to each other. Sometimes, your employer’s card will hear from your personal cards that one of the authorized users of your employer’s card has declared bankruptcy and your authorization is revoked.

Between you, your attorney and your employer, there’s a good chance that you’ll be able to make arrangements that will work. Your employer has a good chance of being able to continue reaping the rewards of your hard work, and there’s a good chance the bankruptcy process can give you a fresh financial start.

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