Question about filing alone and credit union

[davie20001]

Hello...I am married and have a pretty good job, but very much in debt and it is affecting my health and marriage and my relationship with the kids. We are about $70k in cc debt and it doesn't seem to be going down.

Anyway, a couple of the cards are in the spouse's name as the primary.

Basically, in trying to keep everyone happy and fed and a roof over their heads, I used up all of our cc balances and ran up these big bills, so it is my fault we are in this position so I want to take the hit alone.

1) I was wondering if it would look bad to the court/cc companies if I moved all of the cards over to my name only and filed by myself.

2) We have a credit union checking account that we have had for over 10 yrs now. We also have a cc there and a heloc. They are in both our names. If I filed, how would this affect our credit union account(s)? Would we have to move to another bank? What happens to the heloc?

Thanks...I appreciate any advice. I know, I am a bad person/dad/husband for doing this to our family, but at the time, it was the only thing I could think of to keep us going during the heh days.

Dave

[Boscoe]

Credit Unions all have a "cross collaterization" clause which allows them to empty out your checking account if you default on other loans. Not a good thing.

You DEFINITELY need to open up an account at a different bank, one where you have no cc's or other debt, preferably. Then bring your balance at the credit union down as low as possible,

You will likely need to reaffirm the HELOC debt with the cu, as well as the 1st mtg with whomever holds that note.

But definitely move your $$ to a new bank or you may well lose it all when you file. Credit Unions are bad that way.

[davie20001]

Thanks Boscoe! Do you have any advice on the moving of the cc's to just my name?

[Boscoe]

Dave - I am not an expert at this, but I do not believe you can "move" ownership of credit cards that have balances owed on them.

While I understand your motivation to file bk alone and not have it affect your wife, her credit, etc, it may end up being financially better to file jointly.

Your first step needs to be to speak to a couple of attorneys about filing the bk. Depending where you live, you can probably exempt alot more assets by including your wife.

What state are you in? And when do you plan on filing?

[davie20001]

We live in VA and I have no idea when I plan on filing...We are current on things (barely), but its eating at me every minute. I have spoken to a well respected lawyer and he said we should file jointly, but the wife is totally against it. The mortgage is in both our names, the cars, etc...we are not getting divorced, so if I file, then she should not be affected and we can still keep our things, right? God, I hate this!!

[JollyGG]

Hello...I am married and have a pretty good job, but very much in debt and it is affecting my health and marriage and my relationship with the kids. We are about $70k in cc debt and it doesn't seem to be going down.

Anyway, a couple of the cards are in the spouse's name as the primary.

Basically, in trying to keep everyone happy and fed and a roof over their heads, I used up all of our cc balances and ran up these big bills, so it is my fault we are in this position so I want to take the hit alone.

1) I was wondering if it would look bad to the court/cc companies if I moved all of the cards over to my name only and filed by myself.

Sorry but this will not work, the trustee could see this as fraud, and that is something you want to stay well clear of.

2) We have a credit union checking account that we have had for over 10 yrs now. We also have a cc there and a heloc. They are in both our names. If I filed, how would this affect our credit union account(s)? Would we have to move to another bank? What happens to the heloc?

Credit unions are know for their cross collaterization clauses. What that means is if you defalt on one account with them they take the money from your other accounts. Before you file or before you default open a new account at another bank and take all your money out of the credit untion.

Thanks...I appreciate any advice. I know, I am a bad person/dad/husband for doing this to our family, but at the time, it was the only thing I could think of to keep us going during the heh days.

Dave

We all made some poor choices that led us here and we do not judge. However, I would be very hesitant to assign the whole blame for this situation on you and you alone. Even if you were in charge of the bills you are not the only one in the household spending money. Give yourself a bit of a break. The solution is going to have to be a family affair no matter if you and your spouse file together or not. You will all have to work together to make a budget and live by it.

We live in VA and I have no idea when I plan on filing...We are current on things (barely), but its eating at me every minute. I have spoken to a well respected lawyer and he said we should file jointly, but the wife is totally against it. The mortgage is in both our names, the cars, etc...we are not getting divorced, so if I file, then she should not be affected and we can still keep our things, right? God, I hate this!!

You'll need to sit down and work your budget both ways and figure out if you can live within your means without just your debt. You also need to run the numbers with all of your debt gone. You may be surprised once you look though reciepts and everything at how little is left at the end of the month for credit card payments.
You also need to sit down and have a heart to heart about how you (as a family) got into this situation, how you are going to change your (families) spending. You also need to discuss each of your fears about this situation. Then you need to do alot of reasearch. Alot of us started this journey with some preconcieved notions about bankruptcy and some of those had to go out the window before we could be comforatable filing.

[davie20001]

Thanks Jolly...what is I did move the cards into my name and then wait about 3 to 6 months to file? would that make a difference?

[Boscoe]

Dave - the only way you can do this I think is to get a loan or open up new credit cards with balances large enough to cover the debt in your wife's name. But you would need to wait at least 6 months and make a few payments on the new cards or it would not look good to a bk trustee. You have to prove (usually by making at least 3 payments) that you plan to pay this back and that you did not take the loan out with the express knowledge that you were going to file soon after.

The only other option is to leave her debt out of it and therefore not get it discharged, which in my opinion would defeat the purpose of filing bk.

You should definitely see a bk attorney or 2, WITH your wife so maybe the attorney can convince her.

Many of us know the feeling of overwhelming debt and uncertainty about your financial future. It can certainly affect everything, your job, your family relationships, your marriage, the romance in your marriage (if you know what I mean), etc, etc.

If nothing else, your wife should want all of that to improve, and it won't until either you a)win the lottery or b) file.

[RickInMich]

Thanks...I appreciate any advice. I know, I am a bad person/dad/husband for doing this to our family, but at the time, it was the only thing I could think of to keep us going during the heh days.

Dave

Dave,

You ARE NOT a bad person, bad dad, or bad husband. You may have made bad financial decisions -- many many of us have! -- but you are not a bad person. Do not let this situation affect your marriage and your kids, especially the kids. Keep it all in perspective. You WILL get through this in time. The only truly important things in your life are your wife and kids and family.

What I am finding is helping is I'm looking at our financial situation like a business. Our "business" has an unqualified accountant (me), and the accountant made some bad choices, and now the business has to file BK. This happens in businesses every day.

Hang in there!

Rick

[Boscoe]

Yes, we are making a cold hard business decision to do this. Nothing more or less.

The worse move, in my opinion, is to do nothing and "hope" that the debt will go away, and live in financial misery for many more years.........

[genseeker]

Dave, just a few weeks ago I was in your position. My husband did not want to file but I was definitely going to file. The way I covinced him to file a joint petition was not hard at all.

1. Sit down with your credit reports and list every single debt. List the balance, payment, who it belongs to, type (like credit card).

2. I then transferred the info to some old note cards I had lying around. I put the name at the top and then letter coded the papers (H/J/W) just like in the BK papers.

3. Take 3 sheets of paper and label them husband/wife/joint. Then list the income and payroll deductions for whomever the sheet is for. You will each have a sheet, plus a joint sheet.

4. After you figure that, then subtract regular expenses. On the joint sheet, just list out your regular expenses, like power rent/mortgage and similar. Then list things that vary monthly, like groceries and gas. Basically get all your expenses on that sheet. Then list all the debt that can be discharged. Once everything is listed, subtract all the expenses form the income to see what you actually have left every month. Use the means test to guide you because you may forget something like entertainment or clothing.

5. For the individual sheets, you need to figure what % of the household income (gross) you each contribute. You will have already listed your personal income and payroll expenses. Use the % you figured earlier to calculate your portion of monthly expenses. For example, if you make 2500 per month and she makes 1500 per month, then you contribute 62.5% of the income so when listing the monthly expenses, you assign 62.5% to you and the remainder to your wife. So if you spend $500 per month on groceries, then $312.50 gets listed on your individual sheet. Finally you list your dischargeable debts at the bottom. Calculate how much disposable income you have left each month, for each of you.


In my case, I make very little because I am disabled. However, my husband and I have a lot of joint debt. I explained to him that once my BK was discharged I would not be responsible for those debts, but he would still be responsible. We are not in a CP state. However, he makes most of the income so we could not afford to have his pay garnished or bank accounts seized if a creditor got a judgment against him. Now the only joint debt is our student loans we consolidated, which I explained to him are not discharged.

After I showed him the worksheets I made and showed him which debts he could still be sued for, he finally agreed to file joint. Now he says it was the best thing he did, to listen to me and file joint.

[CATCHMEIFYOUCAN]

DAVIE2001, I sent you a PM (private message), I had filed in the state of Viriginia, and had an excellent lawyer. I belonged to a couple of credit unions, and had loans from them as well as credit cards. Get another account opened else where before you file as you may have trouble getting an account from a bank after you file! Let me know if you want to discuss a bit more, although I will tell you, I don't have kids or a house, I went from Ch13 and was able to convert to ch7.

Best Wishes, CMIYC