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What to do if your accounts have been maxed out by someone else

What can you do if you find out that someone you know has used your credit cards or credit cards in your name to exceed or max out the spending limit? You'll be left to pay the bill if they don't, and that means you're in debt that you didn't even accrue. While one of the options may be to file a lawsuit for identity theft or fraud, bankruptcy can also result from this kind of excessive spending.

It may not be surprising that many people don't want to file a lawsuit or request criminal charges against a family member for using credit cards in their names. The damage to the person's credit rating has already been done, and sometimes, pressing charges is the only way the negative information on the credit report can be removed.

In cases where the account was a joint account, both parties are liable for the spending of others. For instance, if a parent co-signs a loan, the child and parent are both responsible for the bill. If a bill goes unpaid, both parties can face the ramifications. That means that you could be facing a judgment against you and a wage garnishment, or you may find that you have to file bankruptcy to clear the debts you can't afford to pay.

With joint credit cards, both parties have the ability and authority to shut down the account. Even if it's been maxed out, you can close the card so it's not in use any longer. At that point, you can focus on paying it off or working with your attorney to go through bankruptcy.

Source: Credit.com, "Help! My Mom & Dad Maxed Out Credit Cards in My Name," Jeanine Skowronski, Nov. 13, 2015

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