Should I file separately, now?

[edgybob]

I need to file BK. My wife and I have some accounts, house and cars, in common. But for the most part we have separate credit cards and other accounts.

Her accounts and our joint accounts are up to date. My personal credit card accounts are in collection or are in court.

I work and earn about $45,000 per year. My credit card debt is about $25,000 and we have no equity in our cars or home. I figure about $200,000 total debt, cards, autos, home.

My wife just became unemployed. She is due about $7500.00 in severance, maybe less.

She just started a business and is afraid she will lose it in BK. Also, she used mostly credit cards to start the business. Although the only assests are the barres (ballet bars) and some folding chairs. I believe the floors and mirrors are permanently attached to the building so now belong to the landlord.

Here are my questions:

Does it make sense for me to separately file personal BK now, under current rules? Then after it is discharged (or in 90-120 days), have my wife file under the new rules. As she is unemployed, her lack of income should make her discharge as simple under the new rules as it is under the current rules.

Any thoughts?

[StaciMM]

Is there anything that gives you concern enough that you need to file now? If not, my only thought is that if she is not going to be ready to file for 3-4 months (I'm assuming she is looking out for her severance pay and that some of her business expenses were recent charges) I would say wait & file together. I've never heard of attorneys charging more for joint filing than for single, so if you file separately you'll pay fees now and she'll pay later. If you both file together later, at least you don't pay extra fees.

Other than that, I'd just suggest that you go ahead and start researching your state's exemptions and such. Well, and also that she should stop charging on her accounts ASAP, other than necessities, to avoid issues there when she does file.

I need to file BK. My wife and I have some accounts, house and cars, in common. But for the most part we have separate credit cards and other accounts.

Her accounts and our joint accounts are up to date. My personal credit card accounts are in collection or are in court.

I work and earn about $45,000 per year. My credit card debt is about $25,000 and we have no equity in our cars or home. I figure about $200,000 total debt, cards, autos, home.

My wife just became unemployed. She is due about $7500.00 in severance, maybe less.

She just started a business and is afraid she will lose it in BK. Also, she used mostly credit cards to start the business. Although the only assests are the barres (ballet bars) and some folding chairs. I believe the floors and mirrors are permanently attached to the building so now belong to the landlord.

Here are my questions:

Does it make sense for me to separately file personal BK now, under current rules? Then after it is discharged (or in 90-120 days), have my wife file under the new rules. As she is unemployed, her lack of income should make her discharge as simple under the new rules as it is under the current rules.

Any thoughts?

[edgybob]

I have several concerns.

I am concerned about protecting her small severance package. It is only about $7k, but we could use the money.

Seondly, I am concerned that my salary may be high enough under the new rules to force me into some sort of garnishment. I really want to avoid that.

Next, I would like to save my wife's dance studio. She financed it using her creidt cards. I am afraid she might lose it. Even though it has not opened yet.

Also, our ski boat, worth about $2500, is in her name and we would lose it if we filed together. If we file separately. We could sell the boat between now and the time she files.

My thoughts are if I file separately under current laws I should be able to discharge my debt, uneventfully. That being done we could allow 60-90 days pass from the last time she uses her cards and sells the boat to the time she files. Also it may put her severance pay out of jeopardy. Her only income in 90 days will be her unemployment insurance. She should be able to discharge successfully under the new law. The only issue is any tax refund that we may have coming.

What are your thoughts.

Is there anything that gives you concern enough that you need to file now? If not, my only thought is that if she is not going to be ready to file for 3-4 months (I'm assuming she is looking out for her severance pay and that some of her business expenses were recent charges) I would say wait & file together. I've never heard of attorneys charging more for joint filing than for single, so if you file separately you'll pay fees now and she'll pay later. If you both file together later, at least you don't pay extra fees.

Other than that, I'd just suggest that you go ahead and start researching your state's exemptions and such. Well, and also that she should stop charging on her accounts ASAP, other than necessities, to avoid issues there when she does file.

[StaciMM]

If & when the boat is sold, keep records to show where the money goes-otherwise it might look like you're up to something. It seems transferring non-exempt items into exempt items if fine, but if you can't show that it may appear that you're hiding assets.

When you consult with an attorney (free consultation) I'm sure they can go over more of what to expect regarding your wife's business, etc.

My thoughts are if I file separately under current laws I should be able to discharge my debt, uneventfully. That being done we could allow 60-90 days pass from the last time she uses her cards and sells the boat to the time she files. Also it may put her severance pay out of jeopardy. Her only income in 90 days will be her unemployment insurance. She should be able to discharge successfully under the new law. The only issue is any tax refund that we may have coming.

What are your thoughts.

[HHM]

Given your overall situation as you describe it, $25K seems like a realtively small amount of unsecured debt to be filing bankrupty over. You probably have better options.

What a lot of married couples don't realize is that there really is no such thing as "filing seperately". Yes, legally, one spouse can file and the non-filing spouse is not considered a "debtor" in bankruptcy. BUT, insofar as you are married, all of the non-filing spouses income and assets are a factor in the filing spouses bankruptcy, because no matter how seperate you keep your income and and assets (with some excetions), the filing spouse has some interest in the assets of the filing spouse and the non-filing spouse invariably contributes to expenses thus skewing the budget of the filing spouse. In your case, you arguably have a one-half interest in your wife's severance package, so even if you file bankruptcy and your wife doesn't the trustee still "might" have a claim to half of the severance. Also, in bankruptcy, it rarely matters whose name is on what title when it comes to married couples.

And if you live in a community property state, it almost never makes sense for one spouse to file without the other since all debts are presumed to be community debts.