Joint accounts come into play when young couples tie the knot. Common joint accounts include checking accounts, savings accounts, credit cards, mortgages and auto loans. Joint account holders use their credit to obtain the line of credit and are financially responsible for paying the loan. In return, they get property rights to the equity such as the house, vehicle or checking account. Spouses and parents are the most common types of joint account holders. Removing an account holder depends on the type of account.
Spouses use joint accounts to pay their monthly bills and merge their financial lives. Joint account holders get the benefits of having the credit history on their credit report. This is, of course, assuming that the credit card is used responsibly, paid on time and in good standing. Joint account holders also get equal rights to the equity in the joint bank account and collateral loans.
Before you sign as a joint account holder, make sure you understand your responsibilities. Unlike authorized users, joint account holders are financially liable for the balance of the credit account. Should the original cardholder stop making payments, the creditor may come after you for the balance on the account. The most common reasons a joint account holder withdraws from an account include divorce, removing a parent from an account and withdrawing co-signor status.
Removal of Joint Account Holder (Credit)
It depends on the account type as to whether you can remove yourself as a joint account holder. Typically lenders do not remove joint account holders from accounts. You signed a contract and were extended credit based on both credit histories of the account holders. By removing you from the account, the lender loses the ability to go after you for payment if the other party defaults. You can ask them to remove you, but rarely do creditors comply. Your other option is to pay the account off and close it. The other creditor may reopen an account if his individual credit history merits the extension of credit. For mortgages and auto loans, the original creditor can refinance with only his name, thereby removing you as a joint account holder.
Removal of Joint Account Holder (Non-Credit)
Banking accounts such as checking accounts often have a parent or guardian listed as a joint account holder when the account is opened. Unlike on credit accounts, you can remove yourself as a joint account holder on non-credit accounts depending on the bank's policies. Some banks allow you to simply fill out a form relinquishing your rights. By signing this form, you remove all access and rights to the account and all money in the account. Other banks require both parties close the account to remove a joint holder and reopen the account in the other person's name.
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