Joint CC

[njtrucker]

I am considering filing ch 7, but it would just be me and not my wife. I plan on stopping payments on the unsecured debt that is in my name, but what should i do with credit cards that are in both of our names?

I had read somewhere that if i file and she is on the credit card they will go after her for the debt. Can i keep these cards and just continue paying the monthly bills? If i stop paying these it will hurt her credit, which i am trying to avoid. Since most of our debt the i am trying to discharge is in my name only, I am trying to keep her credit up.

Should I stop paying her bills also? I if continue to pay these cards and not the others, is that considered payments that the trustee could go back to the CC for?

[Floridagail]

You can file on your own, but why not have fresh start on all cc debt. If you file on your own you cannot pay any cc, ( your wife can continue to pay them but not you. as she is not part of bankruptcy and will be responsible anyway now.) You must report all cc debt, They will be reported in your bankruptcy on your credit report also. Also your wife income will be figured in your means test, so keep that in mind. It is best to talk to free visit with bkrptcy attorney about your situation. Good luck.

[njtrucker]

I am trying to keep her credit good since it was my mistakes that caused this and i do not want to penalize her.

When you say i can not pay, we have joint accounts, can i not pay out of that account?

[StartingOver08]

If you pay your wife's creditors and not your own, it could be considered a preferential payment. The Trustee may or may not go after preferential payments, it depends upon the size of the payment and when the payments were made. If the payments are small (under $600 total for the 90 days leading to the filing) the trustee may just leave the payments where they are with the current creditor.

Read this article on preferential payments for additional insight:



1. to or for the benefit of a creditor;
2. for or on account of an antecedent debt owed by the debtor before such transfer was made;
3. made while the debtor was insolvent;
4. made - (A) on or within 90 days before the date the petition was filed; or (B) if the creditor was an insider, on or within one year before the date the petition was filed; and
5. that enabled the creditor to receive more than the creditor would have received if - (A) the case were a case under Chapter 7 of the Bankruptcy Code; (B) the transfer had not been made; and (C) the creditor received payment of such debt to the extent provided by the provisions of Chapter 7.

To recover a preference, the Trustee, DIP or Creditor's Committee must establish all five elements. In the event all five elements cannot be proven, a preference has not been established and no recovery can be made. However, if all five elements are established, creditors have a number of defenses that can be raised to eliminate any liabilityhttp://www.expertlaw.com/library/ban...e_defense.html

[njtrucker]

If someone else pays the bills, as a favor to help us and there is no expected pay back, is that a problem?

Until i really decide what to do, i want to try an protect my wifes credit. I am hoping to avoid both of us filing.

[Floridagail]

If you have Joint accounts, you should ck with attorney for advice. If anyone pays your cc, it still considered you paying as far as it goes. Why file half way and still struggle with bills? Bankruptcy is Fresh Start not a CRime.

[lrprn]

New Jersey is not a community property state....however, have you taken into account that when both you and your wife signed to be responsible for the debt, if you file bk alone to get rid of just your debt, the co-signed accounts then just turn to your wife to pay the entire amount owed?

Do you have enough debt owed solely by you so that after filing you two will still be able to pay on all the co-signed debt in full?

You are missing a golden opportunity to get rid of ALL the debt for a real fresh start just because you feel guilty. Bankruptcy is a business decision, nothing more. And if you both file, within 2-3 years with on-time payments it will be almost like you both never filed. Credit scores should NEVER be used as the only reason to not file bankruptcy.

Now you may have other legit reasons for not wanting your wife to file with you - keeping an asset that is in her name alone that the NJ exemptions can't protect, for example. But if it's just the guilt talking, then please reconsider filing together. Knowing just what you've told us so far, chances are it's going to be the best option for the two of you in the long run.