Can a married couple file two seperate petitions of Chapter 13

[ilovemyfam]

I am wondering if anyone has any knowledge of cases where a husband and wife were able to file two seperate chapter 13 petitions if they own all secured debt jointly so that they get the benefit of have 1,000,000.00 in secured debt limits. Also, how do I go about trying to find a good bankrutpcy attorney that will work with me . Need help so bad,,,,I am stressed to the max...

[HHM]

Not exactly sure what you are saying.

If you are jointly liable for the debt, then each of you is liable for 100% of the debt, not really sure how separate 13's helps you with that. Maybe you can elaborate on what you are hoping to accomplish.

However, to answer the basic question, a husband and wife CAN legally file separate BK's. But it would be a VERY RARE circumstance where it would make sense to do so (especially separate 13's).

[ilovemyfam]

I would like to keep all our properties even though there is no equity in them, and we owe 1.5 million on all 5 properties, hence our secured debt, which is over the 13 limit of 1, 000. 080.00. If we seperately filed, we would each be allowed to have that 1 million in secured debt. correct? just like you get to double your exemptions.

[AngelinaCatHub]

Also, even if filed separate as doubtful mentioned by HHM, your combined income and your combined debt would be evaluated. What you are basically asking is 'can you beat the system' and get a double dip. In a word, no. 'Hub

[ilovemyfam]

HUB, I am not sure how that would be double dipping. I need the protection of a chapter 13 because I am trying to prevent a forclosure on my home, and I have IRS debt from an audit. I do not have any more assests, and I would like to file chapter 7, because there are no limits, but need the chapter 13, but they put limits on secured debt, and unsecured debt. I am not trying to double dip, but if we get double the exemptions for husband and wife, why not get the same with secured and unsecured debt..

[despritfreya]

The answer is "no". As HHM stated you are each 100% responsible for the debt. You cannot split the baby just to meet the 109 limits. I suppose you could try but when the creditors file their claims the game will be over. If you are over the debt limit and want to "reorganize" you need to do an 11.

Des.

[catleg]

I am in a separate chapter 13 case from my wife, because of the unsecured debt limit.
I think this is becoming more common.
But as Des mentioned your houses would have to be titled separately and your debts individual responsibility.
Sounds like chapter 11 is better suited to your situation.
A chapter 13 trustee would be very pesky about those properties, assuming there is some unsecured debt that is not being paid.
Look on pacer for attorneys handling personal chapter 11's in your district and their fees.
Supposedly there are some that will do it for 10k, but there's also ongoing trustee and accounting fees.

Unless you have a good rental stream from those properties I'd thin out the herd a bit.
Real estate ain't coming back anytime soon.

[AngelinaCat]

Hello ilovemyfam:

Welcome to the forum. I moved your post and its replies, from the 'Bankruptcy & Credit News' forum, where you posted it, to the 'Chapter 13', where it properly belongs. Please watch where you place questions. There are categories for almost question possible. Thanks

[ilovemyfam]

catleg, if they would allow you to file seperately for unsecured debt limits, why not the secured debt also? I have both of those issues...Have you gone to your 341 meeting and how did the trustee deal with that.. Chapter 11 is way to expensive... I would file a seven, but I cannot as I am behind on mortgage and dont want to lose it ..

[HHM]

I would like to keep all our properties even though there is no equity in them, and we owe 1.5 million on all 5 properties, hence our secured debt, which is over the 13 limit of 1, 000. 080.00. If we seperately filed, we would each be allowed to have that 1 million in secured debt. correct? just like you get to double your exemptions.

Nope, not going to happen that way. You are not 50% liable for the debt. If both of you are on the notes, then you are each 100% responsible. You will not be able to circumvent the debt limits on secured debt if you are both on all the mortgages. Sorry.

[ilovemyfam]

Hmm, interesting that you state that we would be 100% responsible as I have learned that say someone is getting devorced, and they are both on the mortgage, the borrower is not responsible for 100% of the mortgage, if there is a co borrower. Each of them are responsible for half of that mortgage, not 100% each..so why in this case would we both be responsible for 100%.. Have you any experience or knowledge with regards to a situation as this

[HHM]

Not sure where you heard that. Nothing could be further from the truth.

Divorce has nothing to do with the obligation to the bank. A divorce court can divide liability between the spouses relative to each other, but the divorce court CANNOT alter the terms of the note relative to the bank.

The divorce court can say, husband, you pay 50%, and wife you pay 50%. But the divorce court CANNOT say, GMAC mortgage, the wife is now only responsible for 50% of the mortgage debt.

Likewise, for 109 debt limits in bankruptcy, if you really are jointly liable for the debt, separate BK's is not going to change that fact.

The main question, why do chapter 13 in the first place, what do you hope to accomplish. Are you behind on payments so you are hoping to use chapter 13 to catch up? Or, are you simply not aware of your full options. If there is no equity, and no unsecured creditors, a chapter 7 is not out of the realm of possibility, it is just not clear from what you have posted why you feel the need to file BK in the first place.

[AngelinaCatHub]

Hmm, interesting that you state that we would be 100% responsible as I have learned that say someone is getting devorced, and they are both on the mortgage, the borrower is not responsible for 100% of the mortgage, if there is a co borrower. Each of them are responsible for half of that mortgage, not 100% each..so why in this case would we both be responsible for 100%.. Have you any experience or knowledge with regards to a situation as this

Apples and Oranges. BK is in static law. A divorce is in agreement form. Both parties (through the Court) agree to a settlement of divorce. It then is decreed. Then it is awarded.

BK is the letter of law.

I know you wish to save your house. You must have an income or you would not go 13 idea. Dump the rentals and the mortgages of same. Pick up your life and put all towards the house you wish to save. I cannot dictate to you what you should do. Just what I would do. 'Hub

[despritfreya]

The way this thread is reading, OP will do what OP wants to do. OP thinks an 11 is too expensive and believes he can claim only half the debt to qualify for a 13. If he proceeds down the path and is wrong we can say "we told you so". If he manages to make a go of the 13 then he will tell us "I told you so".

Having handled numerous 11's similar to OP's here is why the 11 makes more sense:

1) Legal fees for an 11 can be high but so are the 13 Trustee's fees. Many times it is just a trade off. But the additional legal fees are well worth it if you can keep what you want to keep.

2) No issue with debt limits.

3) In a 13, unless the properties are self sufficient and produce income, 13 Trustee is going to require either a 100% payback or the surrender of the asset as such assets are not only non-exempt but they are not "necessary for an effective reorganization" and cause the diversion of disposable income.

4) The diversion of $$ away from creditors is much less of an issue in a Chapter 11 where the Debtor-In-Possession acts as the Trustee. So long as the mortgage lenders are being paid - curing the arrears in the Plan while maintaining going forward payments - it is doubtful that anyone would question keeping property that is not necessary. Be mindful however, that any strip offs or cram downs, unless the property produces positive cash flow and there are no cash collateral issues, will be a potential problem as it relates to "necessary for an effective reorganization" in a lift stay action brought by the lender.

All in all, a Chapter 11 will work better but. . .

Des.

[ilovemyfam]

Des, thank you so much for your response. Okay, I have heard that chapter 11's are very expensive, but if you are saying that Debtor in possesion acts like the trustee, does that mean that there will be no trustee fees for watching over the plan. I have talked to several attornies and they all say, chapter 11 but that it is costly. I would like to find someone that is knowledgable with an 11 and I am looking for find a book to read up on it... It does seem more rare for people to file an 11 but, this is what I seem to be getting. I read somewhere that you have to have a panel of creditors that will look at your plan? is that accurate?