bankruptcy & co-signer (?) on bank account

Question: My son filed for personal bankruptcy a few month ago & this bankruptcy included his overdraft amount on his bank account, roughly 1000.00. A few years ago, he moved to the U.S., so we went to the bank, so I could get a bank card on his account, to be able to deposit & withdraw money so I could make monthly payment's on his student loan & other debts he had here in Ontario. Now the bank is coming after me, for this overdraft amount, saying when I signed for the bank card, I became a co-signer on his bank account. This was never told to me when I signed for this. When I called about this, the bank manager said this was true & said the statement would be addressed in both of our names but the statement is only addressed to my son. Another thing my son questioned was, if I am co-signer, why didn't I have to sign when he went for the overdraft protection? Can the bank come after me for this money & will this ruin my credit if it is not paid. I never heard of being a co-signer on a bank account, a loan yes, but a bank account no!

Answer: Since the bank account had overdraft protection, it is both a bank account and a bank loan. The first step will be to ask the bank to show you a copy of the paperwork you signed agreeing to be liable for the overdraft. If they can't prove that you are liable, they should stop threatening you.

If you did sign for it, then you are liable for the overdraft. In that case it may be simplest to pay them if the amount is reasonable. Alternatively, you can let them pursue you, but if they do it will have a damaging impact on your credit.

Labels: bankruptcy