Spouse-only filing of Chapter 13?

[rhccapri]

Hello all,

I have found some good info on here already, but would really appreciate input in our situation.

We have several thousand ($40k+) in credit card debt. Not a result of lavish living I can assure you! Today I have finally convinced my husband that Chapter 13 is something worth looking into.

However - preferably it would be me alone filing. The bulk of the debt is on credit cards that were opened under my name only. He has in the past been an authorized *user*, but I removed him as such in the summer of 2006. Same goes for me on any of his accounts. We have never jointly opened a credit card account. The only joint debts we have are our home and our HELOC.

He is self-employed as real estate appraiser. As you can imagine business has been a bit slow of late. I was a SAHM to our 3 boys until last December, when I briefly worked at a local casino. That job wreaked havoc on our home (and I loathed it), and my husband got busy in January, so I quit in February.

Last month I got another job at the same casino, but it is only part-time. However, it's something, right? So, I am now at least employed.

Anyway, my husband does not want to be involved in any bankruptcy proceedings. He fears that it could harm his business, because some loan companies, prior to ordering from him, run a credit check on him.

Since the bulk of the debt is in my name, I want to file alone. Our question is, how will they look at my ability to repay? My job has me bringing home about $600/month. We pool our money to pay bills. Would they consider his income in paying my debt? Does it matter if he was formerly an authorized user on an account that I would put into the Chapter 13?

Thank you for any info you can give.

[woeisme]

You entire household income will be considered when you file CH 13, regardless of whether it's just on your debts or on both your debts. So your husband will be involved even if you file alone, just it won't be on his credit record, but his income will be used to make the CH 13 payments because the payment amount is determined based on ALL of the disposable HOUSEHOLD income, which may very well include a portion of his income. So he has to commit to the budget and helping to pay the payments, but it sounds like he already is doing that with pooling money for the bills, that will have to continue.

Have you checked into whether or not you qualify for a CH 7 based on a family of 5 with your husband's reduced income? If you can make that work, it would be a lot easier in the long run. Good luck!

[rhccapri]

Haven't really looked at Chapter 7. I am on the house and I think that freaks him out. Me too, to be honest! They would then come after the house, correct? Although I think that my equity in the house would be less than the exempt amount. I think together our equity would be less than that, even.

He is extremely averse to filing bankruptcy for himself at this time, due to business issues. We don't want to lose our vehicles (one paid off, one in his name only), nor our house.

Thank you for the information.

[woeisme]

You don't have to lose a house in BK, even CH 7, it really depends on how much unexempt equity you have. If your equity is indeed exempt, you don't have to worry about it, can't lose the house unless you stop making your payments. You do need to be up to date with your house payments to file CH 7, where-as you don't in CH 13. Have your attorney look at both options seriously for you, you might find that one makes a lot more sense than the other given your individual situation. CH 13 is a really long hard road to take if you don't need to, if CH 7 is an option. Not trying to scare you, I think it's the best decision I ever made to file CH 13, but with variable income from your husband's work, you have to get a really good lawyer to make sure you can handle the variations in income and still make those trustee payments (i.e., make sure it's a CH 13 budget you can live with!)