Generally, when you file bankruptcy as the signatory party on a credit card (the owner of the debt), it wipes out your liability for that debt. So if you owe American Express $10,000 and go bankrupt, then it wipes out that $10,000 liability. However, what happens if your son was also on the card as an authorized user (they issued him a card so that he could make charges on your account)? He is NOT liable.
I get asked this question over and over, and although I am confident in the answer, I turned to Google just to make sure I’m getting it right. Here is a very clear Question and Answer article from bankrate.com written by Steve Bucci entitled, “Others not liable for card owner’s debt,”
[A]uthorized users of credit card accounts are not financially responsible for payment of the accounts. But that won’t stop some collectors from asking you to pay. Some reasons they may give is to keep the memory of the person clear or that he would have wanted it that way. The next time you get a call, explain to them that you know your rights and that you are not legally responsible.
Ask them to send you a copy of the original agreement for the credit card account. They just might respond with, “We can’t send information regarding this account to you because you are not the owner of the account.” This would allow you to respond, “I rest my case.” Keep all your documentation with the lender in case you need it for a collector down the road.
They may try to argue that your authorized user is liable, and absent some particular fraudulent situations, they are wrong. Additionally, if they report that bad debt on your authorized user’s credit report, he can file a simple credit dispute to get it taken off.
There are also some situations where your spouse could still be liable for the debt if you were the owner of the account and she was the authorized user. In that kind of situation, it may be safest to file bankruptcy together. That’s a bit more complicated, and I’ll save it for a different post.