Personal Finance

Beware joint LOC accounts

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  • Apr 13th, 2018 1:07 pm
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Dec 14, 2014
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Is this the same with joint credit card (i.e supplementary CC issued for parents). If either of my parents declare bankruptcy, am I on the hook?
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ms2018 wrote: Is this the same with joint credit card (i.e supplementary CC issued for parents). If either of my parents declare bankruptcy, am I on the hook?
Yes
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daivey wrote: The banking experience that I have from one of the big banks allows either party on a joint any to sign product to close it.
Be it bank account or credit card or line of credit or investment account .

The only exception would be on a joint account where it's not any to sign BUT all to sign.
However with line of credits it's any party to sign.


So unless BMO is different which could be the case. But that doesn't make sense for a credit product. I can understand a bank account or investment with money in it that could lose money , etc. But a line if credit I'm not sure .
I have closed joint accounts with two banks when I got divorced. They require both people to do so. Why wouldn't they?
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coolintheshade wrote: So SHE says.
Do you believe everything you read in the media?
The debt when they separated would be laid out in their agreement somewhere. Yes, in this case I believe that he doubled it after. Pretty easily proved by showing statements from time of separation, and it wouldn't exactly take a genius with forensics to determine who has been taking the money and spending it after that date. Duh...
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coolintheshade wrote: ..
.. here in Canada we have some journalistic standards so they should have checked out the story at least a little bit.
Last edited by MrDisco on Apr 11th, 2018 9:10 am, edited 1 time in total.
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Chickinvic wrote: I have closed joint accounts with two banks when I got divorced. They require both people to do so. Why wouldn't they?
I'm not going to argue with your experience. But I can tell you the bank that I have experience at has no such policy in place for personal retail accounts. a joint party can close a joint account without the joint party being there so long as the the account is any to sign . I know this because I did this for customers on a regular basis.

Either the teller that you dealt with didn't know their job or the policy at that bank is different. I'm leaning to the teller not knowing their job to be honest which happens 90% of the time .

On a joint any to sign product either party has 100% control of the account . That means on a cheque account either party can come in and withdraw ALLL the cash without the other being present .
Like wise either party can close the account .

With a LOC the same rule applies .. again if the other bank has different policy in place it could be possible. The only thing however is that the bank I woorked at both parties had to sign to increase a limit.

The logic argument is because of this exact scenario. when one party lose trust over the other or a breakdown occurs. It's better to have either party close the account then deal with a dispute about how we didn't let X close account and then Y maxed out out.
Which banks did u close accounts at?
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atomiton wrote: The trend of having increased detailed legal contracts is to weigh the bargaining power in favor of one party or the other... or in other words, to maximize the ability to squeeze the disadvantaged party... Telus, Rogers, Bell, etc. aren't interested in avoiding problems later, they're interested in maximizing profit margins. And if a contract doesn't suit the bigger party... they have it written in the contract that they're free to change the terms. Just ask those people left holding the bag when that Vancouver real estate developer decided that they could make more money by cancelling a condo project and selling the land instead of building out the property as per agreed upon terms.

Broken promises.

And the paper you sign when marrying is merely a formality from the government's perspective simply registering the event as happening. That's why it's a simple form. It's not a contract between two plus the government, after all.
i hear one of the party is often disadvantaged in divorce court...
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Chickinvic wrote: Did you read anything? He doubled the LOC amount, then maxed it out after they were no longer together.
Allegedly would be the key word. I don't doubt it, but this is someone complaining to the media and the media will run with anything. Since it's a media piece against the 'big bad banks', they didn't get hubbies side of the story. It's just trash journalism hit piece, per usual. It's not like the journalist went out of their way to fact check things.

Plus dude was making a joke.
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divx wrote: i hear one of the party is often disadvantaged in divorce court...
Definitely. Divorce is ugly. On the flip side of things, I've known couples who decided not to divorce but to power through their challenges for the sake of their kids, putting on pretenses as it were... or enduring through the annoyances. In many of these cases, the things they tell me is that once they committed to make it work, at least for now, they ended up growing towards each other again. Of course this isn't ALWAYs the case, but sometimes I feel that those who easily separate/divorce are sometimes doomed to repeat that pattern on the next relationship at the first sign of trouble. Definitely not always the case... but I've always found it interesting talking to people who have had long marriages and ask them about their struggles.

Fruitful relationships are like farms. You have to cultivate the soil, and tend to the weeds... otherwise you'll end up with crap for crops.
I'd love to write history... in advance.
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atomiton wrote: Definitely. Divorce is ugly. On the flip side of things, I've known couples who decided not to divorce but to power through their challenges for the sake of their kids, putting on pretenses as it were... or enduring through the annoyances. In many of these cases, the things they tell me is that once they committed to make it work, at least for now, they ended up growing towards each other again. Of course this isn't ALWAYs the case, but sometimes I feel that those who easily separate/divorce are sometimes doomed to repeat that pattern on the next relationship at the first sign of trouble. Definitely not always the case... but I've always found it interesting talking to people who have had long marriages and ask them about their struggles.

Fruitful relationships are like farms. You have to cultivate the soil, and tend to the weeds... otherwise you'll end up with crap for crops.
seems the biggest commitment in ones life deserve the biggest contract document, so couple knows what they are getting into... with divorce rate around 50%, obviously 1 page doesn't cut it.
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Chickinvic wrote: I have closed joint accounts with two banks when I got divorced. They require both people to do so. Why wouldn't they?
That is correct for true joint (two co-borrowers) credit lines

daivey wrote: I'm not going to argue with your experience. But I can tell you the bank that I have experience at has no such policy in place for personal retail accounts. a joint party can close a joint account without the joint party being there so long as the the account is any to sign . I know this because I did this for customers on a regular basis.

Either the teller that you dealt with didn't know their job or the policy at that bank is different. I'm leaning to the teller not knowing their job to be honest which happens 90% of the time .

On a joint any to sign product either party has 100% control of the account . That means on a cheque account either party can come in and withdraw ALLL the cash without the other being present .
Like wise either party can close the account .

With a LOC the same rule applies .. again if the other bank has different policy in place it could be possible. The only thing however is that the bank I woorked at both parties had to sign to increase a limit.

The logic argument is because of this exact scenario. when one party lose trust over the other or a breakdown occurs. It's better to have either party close the account then deal with a dispute about how we didn't let X close account and then Y maxed out out.
Which banks did u close accounts at?
Your post is half right.
Like any and all other loans each may require additional signing security either for credit line cap or qualifying. These may come in the form of a co-signer/co-borrower(joint) or as a guarantor. Both are very different.
Last edited by mikeymike1 on Apr 11th, 2018 5:30 pm, edited 1 time in total.
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divx wrote: seems the biggest commitment in ones life deserve the biggest contract document, so couple knows what they are getting into... with divorce rate around 50%, obviously 1 page doesn't cut it.
Couples already know what they get into. Essentially everything gets pooled, and everything is split down the middle. That's pretty simple, really. It's not that couples don't know what they're getting into it's that every person on opposite sides of a relationship gone sour generally more highly values their contribution to the union. Maybe the high-paid exec spouse feels they contribution was worth more than the spouse who gave up a career to raise the kids ( male or female, btw ). Maybe the one with higher assets valued their previous assets more, while the other spouse valued their ability to save those assets. It gets complicated really fast, and emotions are often involved.

Ultimately, any couple should be prepared to fork over half their assets, time, and value.

Sometimes, I feel like we should just get 6-year olds to settle disputes where you need to divy things up. You ask a 6-year old how to split a cake between their class mates, and 9 times out of 10 they'll just cut things into even slices, no matter who bought the cake or who they feel deserves more cake.

Same goes for territorial disputes like the South Korea/Japan dispute over the two islands next to each other called Liancourt rocks/Dokto/Takeshima. There's two of them. Just rock paper scissors and the winner gets to choose which one they want.

Sometimes, we complicate things for no other reason than to complicate things.

Of course... it'd get messy
I'd love to write history... in advance.
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atomiton wrote: Couples already know what they get into. Essentially everything gets pooled, and everything is split down the middle. That's pretty simple, really. It's not that couples don't know what they're getting into it's that every person on opposite sides of a relationship gone sour generally more highly values their contribution to the union. Maybe the high-paid exec spouse feels they contribution was worth more than the spouse who gave up a career to raise the kids ( male or female, btw ). Maybe the one with higher assets valued their previous assets more, while the other spouse valued their ability to save those assets. It gets complicated really fast, and emotions are often involved.

Ultimately, any couple should be prepared to fork over half their assets, time, and value.

Sometimes, I feel like we should just get 6-year olds to settle disputes where you need to divy things up. You ask a 6-year old how to split a cake between their class mates, and 9 times out of 10 they'll just cut things into even slices, no matter who bought the cake or who they feel deserves more cake.

Same goes for territorial disputes like the South Korea/Japan dispute over the two islands next to each other called Liancourt rocks/Dokto/Takeshima. There's two of them. Just rock paper scissors and the winner gets to choose which one they want.

Sometimes, we complicate things for no other reason than to complicate things.

Of course... it'd get messy
if it is so simple, then they should print the terms on the back of the marriage certificate and make the couple sign off on it so they don't end up clogging the court system.
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mikeymike1 wrote: That is correct for true joint (two co-borrowers) credit lines




Your post is half right.
Like any and all other loans each may require additional signing security either for credit line cap or qualifying. These may come in the form of a co-signer/co-borrower(joint) or as a guarantor. Both are very different.
Cool, well my post wasn't meant to be read as individual post, as there is another prior post with some caveats. In this case we are talking about unsecured line of credits, for PERSONAL use. All unsecured lines and credit cards can be closed by either party, borrower, co-borrower. I didn't mention guarantor or secured loc in my post. However, in these scenarios a guarantor can also request the LOC to be closed if they no longer want to guarantee it.

Loans, are completely different than LOCs. You can't close a loan, unless you are paying it off it full. Once it's paid, then we can close.
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daivey wrote: Cool, well my post wasn't meant to be read as individual post, as there is another prior post with some caveats. In this case we are talking about unsecured line of credits, for PERSONAL use. All unsecured lines and credit cards can be closed by either party, borrower, co-borrower. I didn't mention guarantor or secured loc in my post.
But you questioned Chickinvic's post stating it was incorrect when it was correct.
daivey wrote: However, in these scenarios a guarantor can also request the LOC to be closed if they no longer want to guarantee it.
No you are wrong here. A guarantor provides financial security and assurance to a finance contract in case of default. A guarantor is not obligated to service the debt unless it goes into default status.
A guarantor can make a formal request to be removed from the finance contract but only under specific service and capacity rules. A guarantor cannot close an account because it is not the 'primary applicant' on the loan.
daivey wrote: Loans, are completely different than LOCs. You can't close a loan, unless you are paying it off it full. Once it's paid, then we can close.
All credit lines whether they are secured, revolving(open ended), installment(closed ended), mortgage, chattel mortgage all fall under the umbrella of financial loans. (you borrow money from a FI with varying degrees of contractual terms and definitions of repayment)
Your definition seems to be very limited in its scope.

..
Last edited by MrDisco on Apr 12th, 2018 12:56 am, edited 1 time in total.
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Chickinvic wrote: The debt when they separated would be laid out in their agreement somewhere. Yes, in this case I believe that he doubled it after. Pretty easily proved by showing statements from time of separation, and it wouldn't exactly take a genius with forensics to determine who has been taking the money and spending it after that date. Duh...
daivey wrote: I'm not going to argue with your experience. But I can tell you the bank that I have experience at has no such policy in place for personal retail accounts. a joint party can close a joint account without the joint party being there so long as the the account is any to sign . I know this because I did this for customers on a regular basis.

Either the teller that you dealt with didn't know their job or the policy at that bank is different. I'm leaning to the teller not knowing their job to be honest which happens 90% of the time .

On a joint any to sign product either party has 100% control of the account . That means on a cheque account either party can come in and withdraw ALLL the cash without the other being present .
Like wise either party can close the account .

With a LOC the same rule applies .. again if the other bank has different policy in place it could be possible. The only thing however is that the bank I woorked at both parties had to sign to increase a limit.

The logic argument is because of this exact scenario. when one party lose trust over the other or a breakdown occurs. It's better to have either party close the account then deal with a dispute about how we didn't let X close account and then Y maxed out out.
Which banks did u close accounts at?
Sometimes there is misinformation. or poor training.

buttttt

if the account is joint and either or can sign... either party can do anything they like to the account without authorization from the other. B/c after all... You're legally entitled to take every single penny out of it... Why not close it?

if it is a joint account where ALL are to sign... both parties are required to make any changes.
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atomiton wrote: Couples already know what they get into. Essentially everything gets pooled, and everything is split down the middle. That's pretty simple, really. It's not that couples don't know what they're getting into it's that every person on opposite sides of a relationship gone sour generally more highly values their contribution to the union. Maybe the high-paid exec spouse feels they contribution was worth more than the spouse who gave up a career to raise the kids ( male or female, btw ). Maybe the one with higher assets valued their previous assets more, while the other spouse valued their ability to save those assets. It gets complicated really fast, and emotions are often involved.

Ultimately, any couple should be prepared to fork over half their assets, time, and value.

Sometimes, I feel like we should just get 6-year olds to settle disputes where you need to divy things up. You ask a 6-year old how to split a cake between their class mates, and 9 times out of 10 they'll just cut things into even slices, no matter who bought the cake or who they feel deserves more cake.

Same goes for territorial disputes like the South Korea/Japan dispute over the two islands next to each other called Liancourt rocks/Dokto/Takeshima. There's two of them. Just rock paper scissors and the winner gets to choose which one they want.

Sometimes, we complicate things for no other reason than to complicate things.

Of course... it'd get messy
It is a lot more complicated than just splitting what you have. What about support going forward? Custody? Child Support? I know several women who have 50% shared custody and are paying large amounts of child support and spousal support and they are completely shocked that this is a the rule.
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fogetmylogin wrote: It is a lot more complicated than just splitting what you have. What about support going forward? Custody? Child Support? I know several women who have 50% shared custody and are paying large amounts of child support and spousal support and they are completely shocked that this is a the rule.
AFAIK in Ontario, whichever parent earns less income, is the one who receives child support on a 50/50 custody deal. Other provinces may be different.
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mikeymike1 wrote: But you questioned Chickinvic's post stating it was incorrect when it was correct.

No you are wrong here. A guarantor provides financial security and assurance to a finance contract in case of default. A guarantor is not obligated to service the debt unless it goes into default status.
A guarantor can make a formal request to be removed from the finance contract but only under specific service and capacity rules. A guarantor cannot close an account because it is not the 'primary applicant' on the loan.

All credit lines whether they are secured, revolving(open ended), installment(closed ended), mortgage, chattel mortgage all fall under the umbrella of financial loans. (you borrow money from a FI with varying degrees of contractual terms and definitions of repayment)
Your definition seems to be very limited in its scope.

..
The original post was about borrowers and co borrowers. sorry to burst your bubble but a joint borrower, coborrower, cosignor, CAN close the account. This was already discussed and has been agreed by 99% of the people on here. if you dont agree or know differently, then I question your information... or maybe the FI you worked at has a different policy. At the FI I have experience with, all parties are physically listed and linked to the credit product and come in and close it at ANY time. so not sure what chicvic was correct about. Chicvic said that BOTH parties need to be present to agree to close the account. That was her statement, and it's incorrect. I followed this up by saying MAYBE just MAYBE her bank has a different policy on this, but it is doubtful. And the reason is that because if parties go through a divorce, the other party MAY NOT want to show up to the bank and sign with you to close the account.... thus it becomes a problem in this case.. Thats why joint any to sign means any party to sign.. aka close the account.
So chicvic was misinformed by a teller most likely.

With regards to secured products, clearly if there is an amount advanced, then the parties need to pay it off before the collateral is released and the product is closed. however on a revolving product, with security, the joint holder can close the product so that no more funds can be advanced. ..

Lastly, if you're so smart and know so much, Guarantors basically make up 0.0001% of applications. In fact no line of credit application is ever done with a guarantor in retail banking anymore.. It was always done with a co-signor. In fact your underwriting brethen, who we often fought with for approvals, would clearly ask for "COsignor" or COBOROWER to get the deals approved.. So you brought up an irrelevant point about something you saw in your underwriting policy chart, when you were helping approve a mortgage back in the day.
The only scenario where we use guarantors is in mortgage deals where the other borrower is basically the spouse, and does not want to be on title, and in some student loans/loc for doctors/lawyers/MBAs, OR in small business, when the owner of the business guarantees the loan/credit for the business. There is practically NO OTHER scenario where a guarantor is used any more. By the way even in these off shoot cases where a guarantor is used, the guarantor is linked to the product and signs the agreement. There is a spot on our agreements that even says "guarnator". The product even shows up under the guarantors accounts.
If the guarantor showed up to the branch and said I want to remove my self from the LOC that I am on, then in 99% of all scenarios, we would CLOSE the account.
..

In the real world, the policy is more fluid. and a guarantor that wants to be removed, where the owner no longer qualifies, we would 99% close the account.
but again, Im arguing with someone that is not customer facing, and doesn't know how banking actually works, Other than underwriting some loans based on TDSR/GDSR and never dealing with customer complaints.
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titaniumtux wrote: AFAIK in Ontario, whichever parent earns less income, is the one who receives child support on a 50/50 custody deal. Other provinces may be different.
Starting to veer off-topic.
You are correct and I am sure it is the same in all provinces. I think generally I find more surprise from higher earning women that they have to pay child support. Everyone understands a stay at home parent who keeps custody should be supported but two scenarios that surprised me. One that I referred to when custody is split and both parents work but there is a salary difference. The other is when both parents make the same salary but one parent has primary custody. A woman in my office has 16 or 17 year old twin sons who chose to live with their dad and she pays a fortune in child support to her husband even though they both have nearly identical salaries. They both make something like $120k a year and I think she has to pay him more than half of one of her post-tax pay checks.

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