Wife refuses to go BK-doing it on my own... house question

[debtmonster]

I just had another 2 hour fight with my wife. I just was at a friend's house and saw how nice of a house he's renting for 1/2 of the price he was paying for his mortgage. The house he's in originally sold for $325,000. I can't believe that he's able to pay rent it for $1300/mo. which includes lawn service and cable. This is a beautiful 2 story home with a 2 car garage, 4 bedrooms, a loft and 2 and 1/2 baths. 2,800 sq. ft. under air. 2 year old construction. I had no idea there was such beautiful homes that you could rent so cheap! When I was in South Florida, you'd be lucky to rent a small 2 bedroom apt for this price!

I was thinking about re-affirming my mortgage. After visiting him, there's no way I plan on keeping my house when I could be living in a much nicer home for the same price. I am like $20-40k upside down in my house. The BK attorney also recommended for me to give back the house if I wanted to.

Since I am going to destroy my credit, I plan on going all the way. I am going to do it on the house, both cars and everything else I can think of. I want to leave the court room 100% debt-free.

Since I am married, do I also have to include my wife's credit cards since her debt is my debt (being that we're married) or do I just need to list my own stuff in the BK?

Another thing... if I go BK on all of this stuff and we get divorced, can a judge make me pay all of this stuff after I was granted a BK?

I don't want to do a BK on that BMW only for a divorce judge to tell me that I have to keep paying it after the divorce. Wouldn't that be like a double-jeopardy?

I think between the house, the cars, my old defaulted creditors prior to my marriage and my wife's debt, we'll (or just me) between $300-400k in debt that I wish to flush down the drain.

I am about $600-700/mo. over the median income for a single person in my state.

What I want to do is buy a $500-1200 beater car and live in a cheap 1 BR Apt after all of this mess is done and over with.

My BK Attorney told me that I must stay current with the house and cars in order to use them in the means test.

Also, since we will be getting divorced, can I go BK on the house while my wife can sell it and get the proceeds (which may be only $2-5k)?

I don't know how she will be able to pay the house ($1100/mo. P.I.T.I.), $740 for the BMW and $309 for our sedan on a $240/wk take home salary after I discharge all of this stuff from my name. She's nuts not to file with me. She wants to be hard headed. I'm not going to keep suffering anymore. If this means a divorce over this BK, then so be it. If it's meant to be, it's meant to be.

I plan on getting a new checking account soon just to pay the house and 2 cars until the time of filing just so I can qualify for the means test. After I file, I'm going to stop paying all creditors 100% like you're supposed to.

[JRScott]

Is all the debt in both your names?

Any joint debt that you discharge from your name would remain in her name even into a divorce.

If you divest yourself of to much of the secured debt though you might be thrown into a Ch 13 instead of a Ch 7

[debtmonster]

I have maybe $100k of unsecured debt. The house would be $146k. The BMW would be $37k. The sedan would be $13k. I am lucky to gross $4k-5k/mo. $5k on a GOOD month. Last month was $3900. By the time I take out business expenses & taxes, I'm lucky to net high $2000's. How can you pay all of that debt on such a low amount?

On the secured debt alone it would be $3200/mo. to pay it back in 60 months.

For all of the debt, $5,000 I would need to net.

The house and cars are in both of our names. She has over $20k or so in credit cards. I have over $100k from past unsecured debt plus a bunch of repo's. I had a repo in March of this year and another repo last year. In 2003 I had a repo. In 1996 I had a repo. All of the repo's have deficiency balances tied to them.

Like for the one in March, GMAC called me and wants $8300. The one last year, they want $7000-8000 from Wells Fargo. The one in 1996 was the same boat with Charter Finance. I also had another one from a lease in 1992 that was also about $9,000 from Volkswagen Motor Credit.

There's so many creditors, I'm having a hard time keeping track of all of them. I should have went bankrupt years ago but did not have the money to do so. For the first time in my lifetime I have the money as long as I stop paying the creditors. I'm only able to do this because I have a passive income. That passive income is slowly being eroded because of the 159,000 people who lost their jobs in September and all of the other economic problems we're having now.

[JRScott]

For a 13 you don't have to have 100% payback, so long as you have 150 or more dollars left each month after allowable expenses they can put you into a 13.

It does sound like you need to do something though.

[Flamingo]

You have the complicated situation, as I stated to you previously in other threads, of a looming divorce and bankruptcy. You will need a good BK and a good divorce attorney to get the whole thing sorted out for you. I cannot gather from your postings above if there is any joint debt and I don't remember from your other filings if you stated anything was joint - if there is you've got a problem filing BK first. You keep stating what you want in your postings; it's going to be what you can and cannot do unfortunately.

[Flamingo]

I do see you mentioned in your second posting the house and cars are joint and that she has over $20,000 in credit card debt -are those credit cards in her name only or are they joint? Since there is joint debt and property (see my posting directly above) talk as soon as you can with a divorce attorney because due to the joint debt filing BK will include your wife in the filing and from your thread heading, that doesn't look like it will occur.

Best of luck to you.

[debtmonster]

Some of it is joint debt.

There isn't any money left over. When I do the means test, it shows negative $600 or something after I fill in all of the fields.

This whole thing could be a lot easier if she would just agree with me or even look at other options, but she won't. If you guys could be a fly on the wall, you would see how frustrating this is for me. I am suffering every single day. We have no money for food or gas right now and there's nothing I can do.

[TEW]

debtmonster
I would not need to be a fly on the wall this was how it was for me. I didn't end up in a divorce but it was an uphill battle trying to get through to DW when I could see no end in sight. She wanted to hang onto the house the car and everything else. She wanted to do things business as usual no changes and just keep going on her merry way. While I was franticly moving money and selling things to keep that lifestyle up for her. But there came a day when there was nothing left and the debt card started getting declined and the CC’s stopped working. Since I was the one watching the checkbook go to near zero on payday and more bills coming in and growing she was sheltered from the real facts. I guess in a way it was my fault also because I was the one that kept it from hitting her in the face. I don’t think she really knew how bad it was or even now how little we had to live on. But she does now and I think her way of thinking is changing. Now she is looking for places to rent that are very nice that we can afford that are more like what we wanted all along. Sorry this really isn’t really talking about BK but it sure is what I had to go through to do what I had to do.
Some people just can’t see to forest for the trees. There were many times I wanted to go see a divorce lawyer. But then again I would think about how DW and I have so many un money related thing between us.
She just basically wanted to keep riding the train I helped put her on.

[debtmonster]

You pretty much described what is happening here. She wants to hang on to everything while I want to be debt-free and start putting money away. I want to start living the financial life that Suze Orman always talks about on TV. I don't have two nickels saved. We both need to put money into an IRA instead of wasting it on expensive cars.

Thanks for your input.

[JRScott]

You know I had an idea, do you pay the bills or does she?

I'd just stop paying on the credit cards. They'll block additional charging after about a month or two late. Take the money you would of paid them to save up for the lawyers or to get yourself another vehicle (with the intention of letting the more expensive one go).

It's just an idea. Maybe if the cards cut her off she'll get to the point of realization.

[TEW]

You know I had an idea, do you pay the bills or does she?

I'd just stop paying on the credit cards. They'll block additional charging after about a month or two late. Take the money you would of paid them to save up for the lawyers or to get yourself another vehicle (with the intention of letting the more expensive one go).

It's just an idea. Maybe if the cards cut her off she'll get to the point of realization.

Jr
that's about what I did but i took a couple more steps. she had a habit of checking the balance with the debit card they drowsing 50 bucks out. she would charge gas lunch and you name it. So i started fulling her car with gas giving her expense money and making her lunch to take to work. it was a lot of for me and i felt like i was being a control freak but someone had to do it.
She has since seen the light i think and NOW she deposits her paycheck and I think it is making her feel like she is contributing more now.

[WoodSprite]

But there came a day when there was nothing left and the debt card started getting declined and the CC’s stopped working.

Hey, TEW, is there such a thing as a Freudian typo? I love this!

[2Bshinyandnew]

I just had another 2 hour fight with my wife. I just was at a friend's house and saw how nice of a house he's renting for 1/2 of the price he was paying for his mortgage. The house he's in originally sold for $325,000. I can't believe that he's able to pay rent it for $1300/mo. which includes lawn service and cable.

Some of the best rent prices go to those with good credit...if you file for BK and your FICO tanks, and it will, you may not get such a great deal. I could be wrong, you just don't know.

Since I am married, do I also have to include my wife's credit cards since her debt is my debt (being that we're married) or do I just need to list my own stuff in the BK?

I'm assuming from your profile you live in Florida? If you file alone, you can include your debt and your joint debt. If your wife does not file, either with you or on her own, the joint creditors WILL go after her for the debt that was in both your names. Even if you are already divorced. Joint debt,bankruptcy and divorce make things pretty complicated, especially if you are both on the mortgage. You can only include HER debt if you file a joint BK petition. You cannot include her debt if you file singly.

Another thing... [COLOR="Red"]if I go BK on all of this stuff and we get divorced, can a judge make me pay all of this stuff after I was granted a BK? I don't want to do a BK on that BMW only for a divorce judge to tell me that I have to keep paying it after the divorce. Wouldn't that be like a double-jeopardy?

It is possible, especially if you file alone and leave her with 100% of the joint debt. The presumption is that you are both responsible for your equitable share of marital debt, and a lot of factors come into play to figure out who is responsible for what, including the length of the marriage, whether there are minor children, earning capacity, etc. Florida Family Law Rules of Procedure characterize all debt incurred during a marriage to be marital, regardless of how titled.

Post BK judgment, a family law judge could say that you still owe her the money, and if you have already gotten the whole amount discharged in Bankruptcy Court, the Family Court judge knows that your wife is now vulnerable to collection of 100% of the MARITAL debt, they might not take to kindly to that.

Two different sets of rules, Bankruptcy and State Family Law. even though Family Court cannot make you pay the discharged debt, as you say, double jeopardy they MAY make you pay alimony/spousal support, perhaps equal to the amount discharged. The judge has very broad discretion in making these decisions, and coming up with solutions. A judge cannot make you pay on your BMW if you don't have the means to, especially if at the time of divorce you have already given it up, but a judge MAY make you pay alimony if you get all your debts discharged and leave her with the ball, even if the marriage was short duration and you have similar incomes, which apparently, you don't.

The Florida Statutes say:

Fl. Stat. 61.075(j) (2008) "Any other factors necessary to do equity and justice between the parties".

If you do want to file without her and include the joint debt, perhaps you could have her sign an agreement that she understands what your filing will mean to her, financially, and she accepts the consequences of that. I'm not a lawyer, but something like that may work if she continues to expect to live above your means. What does she propose you do?

If your wife made more money than you do, the situation would be a bit different, but what I'm getting from your post, she does not. BE CAREFUL. Perhaps consult a divorce attorney, or an attorney who specializes in both divorce and BK.

The bottom line is, if you get all your debt, joint and personal discharged, you could end up owing your wife. If that debt to your wife is characterized as spousal support, and no doubt it will be, you will owe her that debt until it is paid. If there is a large discrepancy in your incomes, you can bank on it.

I realize she is digging in her heals now, but some of the other poster's suggestions, such as stop making payments to your CC now and letting CC companies cancel them, will help her see the light.

If it is possible for you to work together on this, it is really the only way for you both to get a fresh start, whether you stay married, or not. You have no non exempt assets to speak of, so perhaps a good first step would be to stop paying and using the credit cards

I think between the house, the cars, my old defaulted creditors prior to my marriage and my wife's debt, we'll (or just me) between $300-400k in debt that I wish to flush down the drain.

I am about $600-700/mo. over the median income for a single person in my state.

What I want to do is buy a $500-1200 beater car and live in a cheap 1 BR Apt after all of this mess is done and over with.

My BK Attorney told me that I must stay current with the house and cars in order to use them in the means test.

Also, since we will be getting divorced, can I go BK on the house while my wife can sell it and get the proceeds (which may be only $2-5k)?

I don't know how she will be able to pay the house ($1100/mo. P.I.T.I.), $740 for the BMW and $309 for our sedan on a $240/wk take home salary after I discharge all of this stuff from my name. She's nuts not to file with me. She wants to be hard headed. I'm not going to keep suffering anymore. If this means a divorce over this BK, then so be it. If it's meant to be, it's meant to be.

I plan on getting a new checking account soon just to pay the house and 2 cars until the time of filing just so I can qualify for the means test. After I file, I'm going to stop paying all creditors 100% like you're supposed to.

I would consult a Family Law attorney who also does BK. Clearly she will NOT be able to afford the house payment and cars on $240/week. From a divorce standpoint, any equity in the Marital Home, is considered a marital asset and any proceeds netted by the sale would be used as a credit in whatever equitable distribution scheme you agree to or the court orders. If you are in the middle of a BK, I don't know what would happen.

Stop paying on/using the credit cards if you haven't already done so. Stash away what you would have used for the monthly minimum and save for BK fees. Same with the BMW. You may be able to sock away 3 payments woth of $$ before the repo man comes, and there is some $$$ for your clunker.

If you do file BK and reaffirm the house, $1100/mth PITI is not so bad, and if the bank accepts your reaffirmation agreement and continues reporting to the credit bureaus, your credit may improve much faster post BK than if you walk from the house. Of course, you don't have to reaffirm the house, just an idea.

I am not an attorney.

[debtmonster]

We both get paid electronically and all bills are paid with BOA electronic. I can't stop her from paying them unless I open a new checking account and don't give her the account #'s and passwords to log in.

[JRScott]

are any of the CC/Car or Home loans with BoA

If they are then it would be in your best interest to move all accounts to a bank you have no debt at. Many such loans and cards have cross collateralization clauses that can allow them to take money from savings and checking if you fall behind.