Desperate and broke!

[Ernie]

I have questions and I'm hoping someone can help me out.

My ex-spouse sold her house in AZ and got about 35k in equity, loaned her cousin 10K for a down on a house in AZ and cosigned for her. She moved to CA 5 months ago and is renting a place, she has not been able to find employment and spent all the $$ she had from the sale of her house. She has not used her any CC in over 11 months and is in extreme financial debt. She is planning to file Bk in the next month or so.

- Will she be forced to sell the property in AZ even if it's not all hers and she does not live in it. The house probably has no equity.

- How long will she need to reside in CA before she can file.

- Will they question the 10K she loaned her cousin and will they want to know what she did with the other 25K. She will have proof that the $$ was used for living expenses.

Thanks, hope I made sense.

[AMISLANDER]

I have questions and I'm hoping someone can help me out.

My ex-spouse sold her house in AZ and got about 35k in equity, loaned her cousin 10K for a down on a house in AZ and cosigned for her. She moved to CA 5 months ago and is renting a place, she has not been able to find employment and spent all the $$ she had from the sale of her house. She has not used her any CC in over 11 months and is in extreme financial debt. She is planning to file Bk in the next month or so.

- Will she be forced to sell the property in AZ even if it's not all hers and she does not live in it. The house probably has no equity.

- How long will she need to reside in CA before she can file.

- Will they question the 10K she loaned her cousin and will they want to know what she did with the other 25K. She will have proof that the $$ was used for living expenses.

Thanks, hope I made sense.

How much cc debt & why hasn't she used her cards in that long? Were they maxed out prior to 5 months ago, I guess is a better way to put it?

Was this a plan?

[bige1030]

- Will she be forced to sell the property in AZ even if it's not all hers and she does not live in it. The house probably has no equity.

Does she own another property in AZ besides the one she sold? In any case, if she has no equity in the property, the trustee probably won't waste his time with it. It's like the old saying...can't squeeze blood from a turnip.

- How long will she need to reside in CA before she can file.

She can file, but she has to use AZ exemptions until she has lived in CA for 2 years.

- Will they question the 10K she loaned her cousin and will they want to know what she did with the other 25K. She will have proof that the $$ was used for living expenses.

Using the $ for living expenses is perfectly acceptable. The trustee might want to know about it, but since she has proof of expenditures, that should be no problem.

As for the $10K loan, that is an asset. If it can't be exempted, the trustee might want to either collect on the debt or sell it, whichever is most beneficial to the estate.

[AMISLANDER]

My questions above are not meant to be sharp...but...if you're going to go bankrupt, there should be MAJOR debt....that's why I posed the above questions...

[Ernie]

She does not own any other property. She planned on living in the house in AZ, but decided to move to CA to be closer to me, so I could help her out with our kids. She wanted to buy a house in CA, but could not afford it. I have helped her out financilaly as much as I could, but it's becoming a burden on me as well, especially with her being unemployed. She is not maxed out on any of her CC, she has available credit on all the CC, but refuses to use them. She's in debt about 35k. She has always made the minimum payments and has never been late.

The problem is that she has drained all her savings and doesn't know what else to do. I could help out with the rent and utilities until she gets a job, but that pretty much it!

[poorme]

Well, Ernie - this is a tough situation. Not sure if it's tougher on you or the ex, though. Let's see, she's got $35k debt, unspecified but sounds like cc and auto (perhaps?), she has available credit ceiling but won't use it, doesn't have/can't get a job....how's she living and feeding & clothing the kids? I just don't see enough 'cause' for a bankruptcy here. But lets assume she files and gets a discharge...she's still unemployed, has some credit left but won't use it, and still has no place to live...how is that an improvement?

There seem to be some details missing. Is there anyone else who can take them in? What about her family, maybe a loan, or move to a less expensive locale? Sorry, I know kids are involved - like I said, this is tough. But don't let emotions lead her/you to a hasty decision that has long-term consequences.