One spouse filing Community Property State

[frustrated51]

Our case manager is saying we can add the bills that are ONLY in my name to my spouse's Chapter 13 without adding my name to the Chapter 13. Does that sound right? We aren't filing jointly because with student loans we are over the maximum unsecured debt.

Thanks,

[optimistic1]

Sure, because in a community property state, each spouse is liable for the debt, with absolutely no regard to who's name is on the account. In fact, the bills that are in your name only would be discharged from both of you, as long as it was incurred during the marriage, and you have no sole and seperate property for creditors to collect from. When you draw up a petition, you are required to list ALL of your debts, and in a community property state, that means every debt that was incurred by you, or your wife, regardless of whether or not they are joint.

[frustrated51]

So then does that make even one of us ineligible to file then because we will be over the maximum unsecured debt?

[optimistic1]

When did you incur the student loan debt, before or after your marriage took place? Are they including the student loan debt that you incurred on her petition? In almost all cases, student loans are not dischargeable, so I dont really see why the would even consider it.

[frustrated51]

When did you incur the student loan debt, before or after your marriage took place? Are they including the student loan debt that you incurred on her petition? In almost all cases, student loans are not dischargeable, so I dont really see why the would even consider it.

They were incurred before and after. So you don't have to list all your debt? I thought you had to list everything if you listed any of it.

[uscjen98]

Be very careful of this. I got completely screwed doing this. If you live in a community property state you MUST include all debts that occurred during the marriage no matter whose name is on the account. However, for the non-filing spouse, the creditors can still report negatively on your credit, charge off the debts, sue you, etc. The only thing they cannot do is actively try to collect from you (which they will continue to do anyway by pleading ignorance of community property law). In the meantime, your credit is shot to hell. And you have no choice - you cannot pay on these debts even if you want to until the bankruptcy is over. And if you get divorced or your spouse dies, you are back on the hook for the debts. So it is a thousand times better to file with your spouse and get all the protection of the bankruptcy. My husband filed bankruptcy last year - his credit is now 657 and mine is 512.

[frustrated51]

So it is a thousand times better to file with your spouse and get all the protection of the bankruptcy. My husband filed bankruptcy last year - his credit is now 657 and mine is 512.

Yes, it is risky I agree (we sooo need life insurance!) However, we can not file jointly because our unsecured debt is over the limit because of student loans. Most of our accounts are joint. I have a couple small things and the student loans and that is it. We are confused about how this works though and waiting for some clarification from our atty because they are telling us my bills can be included. Many of the things you mention are exactly some of my concerns, but I don't see any other way to do it. If we file jointly we have to do a chap 11 which is a lot more expensive.

Thanks for your experience. It is very worthwhile.

[forgotten]

I don't know how over you are, but the debt limits are due to increase on April 1st of this year.

[forgotten]

My calculation places the new debt limit around $358k. I'm not good enough at math to get the exact number, but that should be close.

[NoTomatoCan]

Frustrated - In case the new April 1 debt limit doesn't help, have you thought about filing separate CH13s?

My wife and I are in the same boat with regards to student loans ($80k me, $60k her) . We end up being about $40k over the unsecured debt limit if we were to file together, so instead we are filing two separate CH13s. So long as each of our individual cases is under the unsecured debt limit we should not have a problem. Plus, in all liklihood the court will simply administratively join the cases.

Just another option. I believe Catleg (another member of the forum) is also going down this path.

A solid case out of Kansas (In re Werts) discusses this concept. Apparently it is becoming more common due to high value lien strips, CC debt, and student loans that are quickly putting couples over the unsecured limit.

Only downside is having to pay (almost) double to our attorney. However it is MUCH better than having to file a CH11.