Chapter 13 vs. Divorce Debt

[gfgettngscrwd]

Why didn't your GF cancel the cards that she was the primary signer if she was not going to be making the payments. Failure to do so left her wide open for him to do exactly what he did, incur more debt in her name.

You can't cancel a card that has an unpaid balance on it.

You have a choice to fight and be bitter in the short term, or bite the bullet and get on with life. Your choice.

We know she is going to have to pay something, we are however trying to minimize the damages. That is what brought me here.

Debt that one party assumes responsibility for in the divorce is NOT debt owed to the ex spouse. It is debt owed to Visa (or MC, Discover, etc.). The only way it becomes debt owed to an (ex) spouse is if he doesn't pay it, and she then does pay it. She can then pursue him for reimbursement for what she had to pay.

Well yes, and now that he is not paying it it becomes debt owed to her. But how do we get that changed on his bankruptcy filing? We need to Have his filing changed to reflect the money he says he owes to these credit card companies removed and that same balance then reported as owed to her. This is what we are trying to research how to do. By having her listed as the creditor instead of the cc companies, she becomes a first priortity creditor.

I think what complicates everything is that she remained a co-debtor on cards even after the divorce. That was not good. Not getting her name removed was bad.

Oddly enough the divorce settlement ordered him to do just this. He didn't. But, the only way you can realisticly do this is to refinance and pay them off. Having been ordered by civil court to have her removed from these cards is a twist I have not yet brought into this discussion, but I don't know if it will matter in BK court.

Did your GF or her divorce attorney not ever consider the fact that the ex wouldn't pay for debt that wasn't his? Surely you all realized that. Does she have any recourse against the divorce attorney who put her into this mess. Why in the world would she agree to assigning responsibility for payment over to someone else, when she had so much at risk?

The gf of course put her trust in the divorce attorney. Remember though that the divorce was drafted before the change in the bk law. However, the div attorney still should have known the change was coming. She had no clue. I was not yet even in the picture. Actually the bk attorney said she had a case of malpractrice against the divorce attorney. As to why she would agree to sign over etc etc, happens all the time in divorce, she thought she was being properly represented and was protected by the wording in the divorce decree. The divorce attorney thought the same thing as many of you, that the debt could not be discharged in bk, obviously he was wrong and it will cost her dearly.

[Granny]

You can't cancel a card that has an unpaid balance on it.

Yes, you can cancel a card, even with a balance on it. I canceled every one of mine that attempted to invoke the universal default rate or that attempted to change my interest from fixed to variable. I paid them off under the old terms, that is until I filed BK.

[gfgettngscrwd]

Yeah but she was only a co-signer, not the primary, at least on some of the cards.

[gfgettngscrwd]

Ok first of all we need to challange his gas expense, we hope to get it lowered from $600.00 which is outragous to $400.00 which is much more appropiate. That still gives him $100.00 a week for gas alone...more than enough. Secondly he has her listed incorrectly as co-debtor on all the cards, we know this information is incorrect. Can we object to this and if so does he have to prove it or do we? We have pulled credit reports from two of the three agencies, I will post more information on what we found later.


She contacted the credit card company that was harrasing her the most, Chase. This was a card assigned to the ex by divorce in which she was primary and he was only an authorized user. The payments had escalated to $384.00 per month (it was in default). They agreed to accept (from gf) $262.00 per month for 5 years for a complete payoff. Now, how do we approach the bankruptcy court to have from his filing the 15k he reported owing on this card removed and then that same 15k added to what he owes her so she can get some re-imbursement back from the trustee?

[lrprn]

You can only cancel a credit card when it has a zero balance. But you can close a credit card with a balance.

It's easy to confuse the two (although each one's impact on your credit scores certainly are different).

http://credit.about.com/od/toughcreditissues/a/closecards.htm

http://www.associatedcontent.com/article/92699/credit_cards_the_right_way_to_cancel.html

[lrprn]

Now, how do we approach the bankruptcy court to have from his filing the 15k he reported owing on this card removed and then that same 15k added to what he owes her so she can get some re-imbursement back from the trustee?

You need retain a lawyer who will file a claim plus file a creditor's objection to the debt in question being discharged. You only have 90 days after the ex's 341 date to file the claim and objection. I don't know if she will get money back or not - the lawyer you retain can give you his/her estimate on the success of pursuing an objection in this situation.

Accepting a deal with the credit card may hurt your gf's chances of pursuing the objection against her ex successfully. Be sure to tell the lawyer you retain about this as well.

Also as I mentioned before, your gf also needs to report her ex's potential bk abuse to the Dept of Justice's US Trustees - here's how to do it and where to send it - http://www.usdoj.gov/ust/eo/fraud/index.htm

[lrprn]

Yeah but she was only a co-signer, not the primary, at least on some of the cards.

Are you saying she's an authorized user, not a co-signer, on these accounts?

If she's just an authorized user, then authorized users are not responsible for paying anything on the balance. But co-signers are as responsible as the other signer for paying the balance on the card.

Does she remember signing the cc applications? (If she did, then she's likely a co-signer rather than an authorized user.)

One way to quickly tell (not 100% reliable) is to check her credit reports. Any account that shows both your gf and her ex's names on it means the cc company says she's a co-signer, not an authorized user.

[gfgettngscrwd]

Accepting a deal with the credit card may hurt your gf's chances of pursuing the objection against her ex successfully. Be sure to tell the lawyer you retain about this as well.

The agreement was only verbal, (phone) but she did make a payment.

Are you saying she's an authorized user, not a co-signer, on these accounts?

I am saying this may be the case on at least some of them, others she is primary and he is authorized user, and the rest she is co-debtor. She pulled two credit reports, we are waiting on the third.

[gfgettngscrwd]

As for her lawer. he is not returning her phone calls to answer any of her questions, she paid his retainor 45 days ago after her first consultation with him which costs 200 bucks, and has only heard from him once when she was panicking about not being at the 341 hearing which was last week. We really think we need to fire him, however we are concerned it is getting late in the game to switch lawyers.

[helpless]

If she is just an authorized user, have the credit card company removed her name, list is as not mine on credit report and it will come off. I know this because my DH filed a 13 and I did not and I was authorized user and they came off my credit report. I agree with the others, if she left those accounts open that she was financially responsible for, she has a real big problem. She should have closed them herself no matter what the divorce decree said, she was the one responsible for the account, he couldn't legally close them. Good luck.

[rrockinggramma]

I still think that you have the right to file the claim on your own, or your gf does. The forms are on the internet, download it, fill it out and submit it. Then see what happens. Let the trustee then object to the claim which will give you a hearing date. Then you can bring in all of your ammunition to the hearing and go from there. It will delay his confirmation which is what you want. Then the trustee or the judge will rule on the claim. I really think they will rule in your favor on this one. Because she is listed as a creditor, she can file her claim for the 15K in his BK even though he listed her at zero. I had a couple of surprise claims filed and the trustee let them go through. I objected to one of the claims and the company (citi) withdrew it cause they knew it was not a legit claim. But she has this right and the form is easy to fill out and submit to the court. By pass your lawyer for now. It is never too late to call around and get another one. But her filing of the claim could/should hold up the confirmation of the plan. If the trustee doesn't object, then he owes her 60 percent of the 15 K or even more, depending on how many claims are filed in his case.

And I agree with your gas expense lowering to 400.00 but not sure how you can get the trustee to change it, if he hasn't already objected to the expenses as presented at the 341. I am not a lawyer of course but I think the trustee has to object to the expenses as presented. I am unclear if an ex can bring about that objection but I am sure you have researched it. So I wish you the best on that point.

[rrockinggramma]

Do you have a Pacer account so you can see what claims and motions that are filed in his case. If not, that would be a good way to stay informed of any objections that the trustee is raising to his plan. I would think the trustee might object to the gas expense but then since he is a salesman maybe not.

[SinkingFast]

I would suggest you seek out a different kind of attny.

Not a regular BK attny or a Divorce attny.

A Creditor's Rights Law attny.

Our attny only turns 4, 5, maybe 6 BK's in a month. I wondered how in the world he paid for his share of the practice, let alone 2 paralegals' salaries.

Our attny is a Creditor's Rights Law attny. That's his bread and butter business. When he files BK's for people, his experience from the other side of the aisle is very beneficial to his BK clients.

[gfgettngscrwd]

And I agree with your gas expense lowering to 400.00 but not sure how you can get the trustee to change it, if he hasn't already objected to the expenses as presented at the 341.

This is why we wanted him at the 341 hearing in which he did not show. She called today again ( she has been calling every day) once again got the secretary, left a message that he was to call her or refund her money, still no reply. Probably not enough for malpractice but this guy is very unprofessional. Is there anywhere you can file a complaint on a lawyer...something akin to the better business bureau?

I would think the trustee might object to the gas expense but then since he is a salesman maybe not.

His sales job does not require any travel, he is a sales manager at one of the major cell phone outlets. Lives 18 miles from work.

I still think that you have the right to file the claim on your own, or your gf does. The forms are on the internet, download it, fill it out and submit it. Then see what happens. Let the trustee then object to the claim which will give you a hearing date. Then you can bring in all of your ammunition to the hearing and go from there. It will delay his confirmation which is what you want. Then the trustee or the judge will rule on the claim. I really think they will rule in your favor on this one. Because she is listed as a creditor, she can file her claim for the 15K in his BK even though he listed her at zero. I had a couple of surprise claims filed and the trustee let them go through. I objected to one of the claims and the company (citi) withdrew it cause they knew it was not a legit claim. But she has this right and the form is easy to fill out and submit to the court. By pass your lawyer for now. It is never too late to call around and get another one. But her filing of the claim could/should hold up the confirmation of the plan. If the trustee doesn't object, then he owes her 60 percent of the 15 K or even more, depending on how many claims are filed in his case

.

Trouble is we don't yet know what amount to file a claim for, if we file for like 30k and later need to ammend it can we or do we need to know exactly what amount when we file a claim.

Here is another twist, should the trustee rule that he owes the money to her and not the credit card companies, I believe the amount either becomes undischargeable or at least a priority claim. Priority claims get paid at a higher percentage then the others.

No we don't have a pacer account yet, how do you set one up?

I would suggest you seek out a different kind of attny.

Not a regular BK attny or a Divorce attny.

A Creditor's Rights Law attny.

We will check into this. How do we go about firing our present attorney and getting our retainor back? Bad enough we had to pay $200.00 for the first consultation.

[rrockinggramma]

There is a state bar ethics board that you can report the attorney too, or at least call and get the forms to file a complaint against the attorney. Our attorney told us that one letter from them can ruin an attorney's entire year. LOL I would call several attorney's to get free consults before paying up front again. It will be tough explaining the story over and over again but worth it if you can get a good attorney the second time around. Keep getting free consults til you get one that you feel really comfortable with and is a bulldog.

As to the amount of the claim, how much could you prove to the trustee that he owes your gf? That is what I would file the claim for. With documentation, you stand a much better chance of proving that she is right in filing this claim. I cannot speak to priority, are you referring to it being divorce debt? I do not know how all of that is handled and will let another person answer that one. If her claim is accepted and not objected to, ruled on in her favor etc, if it isn't considered divorce debt, then I believe she becomes considered an unsecured creditor and will line up with the other unsecured creditors. If it is indeed declared priority by the trustee, judge etc, then she will be close to the front in line to get her money and it could affect the funding of his entire plan, meaning he would have to ante up more money each month to make it work, which is your intent.

As to Pacer, follow this link. You will need a credit card to get it going but it will keep you abreast of everything in his case. You can find his case number by knowing his name etc.
There is a cost of 8 cents per page viewed after you acquire 10.00 in cost. Be careful of the "queries". Make sure they are specific etc. You can also look at other's cases dealt with by this same trustee and kind of get a feeling for how he rules in chapter 13's.

http://pacer.psc.uscourts.gov/