What about non-married and Bankruptcy?

[broderp]

Let me start by saying hello, this is my second post here, the first on my own topic for which I am seeking some answers.

I have been with my "SPOUCE" for 10 years now. We have 4 kids and are not going anywheres as far as splitting up.

We have ALWAYS maintained separate bank accounts and credit accounts, with the exception of a few things.

1. I added her to my Bank account (she has NEVER used it or taken money)
2. We bought our home together (both names on morgage, mine only on insurance documents.)
3. I have co-signed for her for a car, and it's been payed off for years.
4. I may have her on a few of MY CC, again, she has never used them.

My concern is this, I filed bankruptcy YEARS ago, over 15 years, and have re-establihed credit. I have enough credit for my life style and have a fairly high credit to income ratio. (It's the only thing keeping me from have a credit score of over 780) I also live paycheck to paycheck as does my spouce, with the exception she has worked 80hrs a week for the last 10 years. She's now tired and in debt to the point she filled the credit cards almost full with groceries and other required items. (We have a fair division of bills we are responsible for)

My 15K of debt keeps my paycheck busy, and her 15K keeps her overwelmed. I can not afford to help her.

She wants to file bankruptcy. I've filed and wish I hadn't in retrospect, but she says her filing will not affect me or my credit, as she's planning to file in such a way that she gets to "keep" the house and her "newer" car (bought it about 10 months ago, all her credit, a used 2002 Echo for work.)

I've worked so hard to build my credit, and fixing things up in our home but a huge drain on my credit (windows, furnace, carpet, paint, new floring etc..) but I feel I'm still in control. I don't want to ruin my credit.

WILL HER FILING AFFECT ME or is her attorney correct? What can I do to SHIELD myself from this?

[HHM]

First, are you married or not. I assume from the title of this thread, you are not married.

However, if she files bankruptcy, it will not affect your credit in any way. However, regardless of how seperate you keep things, you probably have comingled assets, so there is some risk that your asseets will be a factor in her bankruptcy, and regardless of whether you are married or not, your income is a factor in her bankruptcy in so far as you share expenses, she will have to list your income as a source of income for the purposes of determining whether she qualifies for a chatper 7.

$15K of debt is a relatively small amount of debt to file bankruptcy over, the two of you should explore other options.

[broderp]

First, are you married or not. I assume from the title of this thread, you are not married.

However, if she files bankruptcy, it will not affect your credit in any way. However, regardless of how seperate you keep things, you probably have comingled assets, so there is some risk that your asseets will be a factor in her bankruptcy, and regardless of whether you are married or not, your income is a factor in her bankruptcy in so far as you share expenses, she will have to list your income as a source of income for the purposes of determining whether she qualifies for a chatper 7.

$15K of debt is a relatively small amount of debt to file bankruptcy over, the two of you should explore other options.

We are not married.

We literally do not have any co-mingled assets, at least non that I can think of. I listed about as much as our finances we have together. The only thing we did recently was buy a used minvan for $4000. which i put her name on the title as she loaned me (from a cc) $1500. 4 kids under 12 and no minivan is not a good thing. $4K was CHEAP.

I'll have to see what she knows or her lawyer knows about my income. as a qualifyer for chapter 7. I'm assuming your right, but I can jist my bills as well to show I live paycheck to paycheck.

As far as out debt, you were mistaken, We EACH have about 15K (I actually have closer to 17K in CC debt. Thats 30K or more combined, not to mention the loans I have from my family that I pay back EVERY month (documented with a bank transaction and check) to them in the amount of over $350 a month for a personal loan of about 8K from them. I also have school loans as well as child support from my ex wife and her kids. I have not missed a single payment, and niether has my better half, but she no longer makes the amount to cover minimums, so she will be behind starting in Oct.

The goal is to get rid of her debt, and then she reduce down to one job so we can live like a normal family and spend time together by the beginning of 2006. She would contine to work two jobs and help pay down my debt by 4-5K before letting me finish it off. The hope is that as the bills get paid, the money that was going to thse bills will be deverted to make larger and larger payments on still other bills I currently can only make minimum payments on. It should have a domino effect ...hopefully

Thank you for your help and input.

[StaciMM]

I don't really know about the rest of your questions, but I had a thought. How recent was this transaction? From what you posted, I'm assuming she took a cash advance of $1500 from one of her credit cards? There are time limits (I think 90 days) between cash advances, large purchases, etc. and filing.

I know that many will argue $15k is not enough to file BK on. BUT I also know that minimum credit card payments are due to go up by the end of 2005 for practically all credit card companies, and if she isn't able to make minimums now-she won't be able to then and the late fees, overlimit charges, not to mention interest, will just skyrocket the balances. I can't see any logic in waiting til its worse, especially since the new bankruptcy laws are likely to make BK more expensive (and obviously more difficult) to file.

We are not married.

We literally do not have any co-mingled assets, at least non that I can think of. I listed about as much as our finances we have together. The only thing we did recently was buy a used minvan for $4000. which i put her name on the title as she loaned me (from a cc) $1500. 4 kids under 12 and no minivan is not a good thing. $4K was CHEAP.Thank you for your help and input.

[Lightning]

You have not kept your finances separate if both your names are on certain things, you've purchased items together, shared credit cards, and all the other commingling you mention. You're probably going to need a lawyer to straighten the mess out.

Some states still have common law marriage. If you live in one and have been living together as "spouses" for 10 years, the court will see you as married.

Living together that long and establishing a family and household without legally marrying carries risks and complications. I hope you've either seen an attorney or plan to see one to establish things like power of attorney. If one of you gets sick, the other will be seen as a mere boyfriend/girlfriend and will have no say in medical or financial decisions in the event of an emergency. Also, when one of you dies, the other will not automatically inherit any assets such as the house. Both families could also challenge any beneficiaries you set up for each other since you're not legally married. I hope you talk with them about this as well.

After 10 years and 4 kids, I can't think of a single reason why you're not married. Rather than complicating things, it would actually simplify the situation.

[HHM]

I understood that you each have debt, my point was that you goal is to dishcarge "her" debt only and that generally speaking a two income household ought to be able to manage that amount of debt, or at least look into other options before filing bankruptcy. Has she looked into consumer credit counseling. If she went to consumer credit counseling and they were able to stop interest, she could have that $15K paid off in 60 months at about 260-270 per month (depending on the fee charged by the agency).

Although, I am not a fan of this particular tactic in general, she could try consolidating some or all of the balance on a 0% promotional APR. (however, if you have generally made up your mind to file BK, then don't do this).

When/if she files bankruptcy, she will have to list ALL here assets and ALL her creditors, and ALL her sources of income. Where your income comes into play is the sharing of the household expenses, its no different than if she had a roomate. So, if you have co-signed or are an authorized user on her account, the balance only gets discharged as to her, guess who will still be liable, that's right, YOU. Also, even if your mortgage obligation is $1200 per month, she probably would not be allowed to declare all that amount has "her" expense because she shares it with you.

As lightening pointed out, you really need to see a lawye, you have other issues that should be addressed in addition to her $15000 in debt.

[broderp]

1. I am on NONE of her cards.
2. We "bought" the van using the CC as a regular purchace (no cash advance)
3. Because I was/am going to pay her back the $1500 for the van, I put her name on the title. I can have her sign it over to me any time.
4. No common law marrage in Ohio. (That I'm aware of)
5. She is on my bank account, but does not nor ever has had or used my bank card or money. (can proove this for last 8-10 years with records and statements.)

Lightning,
How would being married simplify this? I was married before and like I said I filed bankruptcy years ago. In retrospect, the only thing it did was screw my ex-wifes credit, for which was the only GOOD thing I was able to get out of it. We had shared cc and bank accounts and all.

I have issurance should one of us die,the house is paid for, the other gets it, we have wills to show who gets what or makes life decisions for the other, and I have lots of life insurance with benifuciaries clearly spelled out. Frankly speaking, if one of us dies, the other would be set quite well, as if the other was still here and be free of a morgage!

HHM,
The only household expence we share is the morgage, and this is my primary concern. I pay (and can prove) all monthly utilites, subscriptions, etc..she paid for food and most of the childrens cloths and things. We each had and paid for our own cars. The last vehicle she bought, she is still paing on (has had it for almost a year) and the vehicle I just bougt was paid for by CC (NOT cash advance) and I used $1500 of her credit, but I am NOT on that account. I put the balance of the minivan ($4000 total) on a loan I got from my family. So techniclly it's paid off. I have the title. I've had it for 3-4 months now.

We have two separate auto insurance policys as well. She pays hers, I pay mine.

I will need to get in touch with my own lawyer, or go with her to see what they say.

Thanks for the differnt ideas and thoughts. You have helped a lot in that is raises good questions i need to be asking.

R