Consumer complaint received 2018-04-06
Company: UNITED SERVICES AUTOMOBILE ASSOCIATION
State: WA
Product: Credit card or prepaid card
Sub-product: General-purpose credit card or charge card
Issue: Incorrect information on your report
Sub-issue: Account status incorrect

Complaint:
On XX/XX/XXXX, my husband filed for a chapter XXXX bankruptcy. I was a non-filing spouse and I was not on the bankruptcy filing. On XX/XX/XXXX, my husband received a discharge from the bankruptcy court - United States Bankruptcy Court for XXXX Washington. That case was XXXX. 

I live in Washington State and I have been married to my husband since XX/XX/XXXX. Washington is a community property state. As such, community property rules apply in bankruptcy cases. On or about XXXX, XXXX, I applied for and was approved by USAA Bank for two credit cards with a {$2000.00} limit on each card. Even though I was the only person listed on the two credit cards, these accounts are a community debt. USAA closed those accounts on or about XX/XX/XXXX even though I was making all payments on time. Despite this, at the time of my husband 's bankruptcy filing these debts were included in the scheduled debt since these debts are part of the marital estate in a community property state. Both my husband 's attorney and the bankruptcy court verified to me that the two credit card accounts from USAA were discharged under the bankruptcy filing. 

On or about XX/XX/XXXX, USAA reported both credit card accounts as 90 days late on my credit report. They continue to send me statements on these credit card accounts as well. Furthermore, they are calling me in an attempt to collect the discharged debt. Despite notifying USAA that these debts were discharged under community property provisions, they continue to attempt to collect on these debts, despite their discharged status. 

The primary purpose of bankruptcy is giving the honest debtor or debtors a fresh start by discharging certain debts. Bankruptcy Code 524  includes community debts as obligations subject to discharge. Even though only one spouse files bankruptcy, the entire community may receive a discharge, which means that the obligation is no longer enforceable against any community property or the separate property of the filing or non-filing spouse. 

Section 524 grants protection to after-acquired community property so long as both spouses are innocent of any wrongdoing. In other words, if all claims are dischargeable and both spouses are eligible for a discharge, even if only one spouse files, then community creditors are barred from asserting their claims against the couples after-acquired community property. As a result, a debtor spouses discharge prevents all collection of claims against the non debtor spouses separate property, with state law determining whether the separate property of the non debtor spouse is liable for community claims. 

In a community property state, debts acquired during the marriage are community debts. When defining separate liability, which USAA is attempting to do as for me, the bank is incorrectly asserting that the debt for the two credit cards survived the bankruptcy filing of my husband. However, what defines a separate liability does not apply in this case. Separate liability is defined as : -debts one spouse owed before the marriage -debts acquired during the marriage in one spouse 's name and never used for the benefit of the other spouse or the marriage. This does not apply since my husband was an authorized user on my accounts. 

Furthermore, this debt is not a debt defined as non-dischargable under the bankruptcy code. 

USAA is breaking federal law by pursuing this debt. There are also damages I have incurred as a result of their negligence for which I will be taking up with an attorney. Damages I have sustained as a result of their acts include a reduction of my credit limit on multiple credit cards and the closure of one of my credit card accounts. All total, USAA 's negligence has caused me to lose over {$17000.00} in available credit because of the inaccurate reporting of this account on my credit report.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation