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Employer and Company Credit Cards

By L. Jed Berliner, Springfield & Marlborough, MA Ban

Are you responsible for a credit card supplied and reimbursed by an employer?  The answer is often “yes”, which leads to painful complications.

You are very likely responsible if you signed the credit card agreement.  Another warning sign is if you must pay the bill and then get reimbursed.  If it shows up on your credit report, then the creditor certainly thinks you are personally responsible.  

You must list the card as a debt in a bankruptcy filing if you are obligated on the account.  The account may then be closed, which can embarrass you to your employer. 

You also must list the employer as a co-obligor.  The company will get a notice of filing from the bankruptcy court and you really don’t need THAT embarrassment.   I suggest using a person’s name in Human Resources and adding a note of confidentiality.  It could look like this:  PERSONAL AND CONFIDENTIAL, Jane A. Smith, Human Resources, Paragon Employer, 124 Main Street, Anytown.

I tell my clients to do their best to have both a zero balance and no mid-billing cycle charges in process on the filing date.  There is no other lawful way to avoid listing the joint company card account.  I’m sorry to say that the card issuer could still cancel the account even if nothing is owed.

An aggressive trustee might argue that the employer’s pending reimbursement to you on the filing date is your asset, or an employer’s pending credit card payment is also your asset instead of being required to be paid to the credit card account.  If raised, you have some extra litigation to pay for and even more unneeded embarrassment with your boss.  My same advice above would apply here:  file on a day when there is a zero balance and minimal mid-billing cycle charges. 

Then there is the worst consequence that no one really thinks of.  As ABC News reported, you are the only one responsible if an employer shuts its doors.

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Full post as published by Bankruptcy Law Network on September 27, 2010 (boomark / email).