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A fear that many people face when they are about to declare bankruptcy is that they are going to harm others as well.  A common fear that pops up all the time is that a person declaring bankruptcy may have a joint account with another person that isn’t going to declare.  This can be a mother, father, or a family friend.

Regardless of who this person is, I wanted to explain a little bit about the rules of your joint banking accounts, as well as what is going to happen during bankruptcy.

Take the name off to protect the person

If you want to play it safe, get the other person’s name off as soon as you can.  What you can do is simply head down to the bank and tell them that you want to take the other person off.  You will sign a few forms and you will be on your way.  That person can then take any money he/she would like out of the account.

The bank can take money in your name

Keep in mind that a bank can seize any bank account that has your name on it.  So, if you share a bank account with your father, you’re going to find out that the banks can garnish this particular account.  They don’t care if the money belongs to you or your dad.  All they are looking for is the name of the account holder.

What about joint account credit cards?

This is whole another story because both parties are going to be liable.  This is why you never want to co-sign with someone that you don’t trust.  If you have $10,000 in debt on that credit card, your co-signer should count that as his/her debt as well.  The credit card company will go after both of you until the balance is paid.

While this can be a complicated process, what I would recommend you do is meet up with a bankruptcy based lawyer.  He/she will be able to explain your state laws, as well as steps that you can do to get on the right path to protecting not only your assets, but the joint account holder as well.

As times go on, you will always find it best to hold your own account to not cause a headache with anyone else.  If you’re strict on getting a co-signer, you will want to do everything in your own power to prove that you can be responsible and that you’re going to pay the bills.  If you fail to do so, all of the above can happen in a flash.