I just had an Ahh Haa moment..now what?

[TheBrokeCouple]

Hi there everybody....

I just keep reading, and learning...more every day. Thanks to all who are kind enough to share.

I just pulled my 3 credit reports tonight, and found that our 3 big CC debts have me listed as "authorized user" in the type of account.

If I remember correctly, my credit wasn't great when we got married, and hubby put them in his name alone...I'm thinking what we should probably do is to have him file alone? Our other debt besides our vehicle is non-dischargable student loans anyway.

Since we want to keep the house anyway...it's deeded in both names, but only financed in mine ( I believe)...but then the van is financed in both names, oh, and there are lots of medical bills in hubby and the for the kids...I forgot about those too...eewwww...this could get messy.

Any thoughts....?

Should we both just file to save the headache? Or would it benefit us later in life to have one of us free from the black mark of bankruptcy if we could work it out that way??

Thanks for any comments!

TheBrokeCouple

[rrockinggramma]

IMO, as humble as it is, I would both just file and get it done. That way creditors can not find any way to come after one or the other of you. And you can work together to rebuild your credit. I think you will be better off in the long run. . .

[TheBrokeCouple]

Yeah, after I thought about what I wrote...I think you're right. Better to just do it...be done with it...and move on.

Thanks rrockinggramma...

[FreshLikeADaisy]

If you're in a community property state, it's kind of a moot point anyway: you'll both have to file. Good luck!

[CindyLou]

IF you are not in a community property state there could be benefit to not filing for you. Why file if you do not have debts to discharge? It wouldn't make any sense to file if you have nothing to discharge!

Here are the community property states:

Arizona
California
Idaho
Louisiana
Nevada
New Mexico
Texas
Washington
Wisconsin

[Granny]

What does living in a community property state have to do with anything? I live in Texas and filed alone. He's not responsible for my debts nor am I responsible for his. They are separate accounts. Community property has nothing to do with this.

We didn't file joint so that if we ever got into trouble again with the house, he could file later to save it again. A very smart decision.

The community property laws are to protect property but debt incurred is the responsibility of the person named on the account.

[CindyLou]

In a community proprty state, debt is treated just like property, some refer to it as "negative property".

Yes, you can file alone, but the creditors can come back on ypur spouse to collect the debt if they find out you are married.

You can aquire credit in your name based only on your score but then once you incur that debt, if it is during the marriage then you are both equally responsible and unless you both file bk then you are just transferring that debt to the other party.

Now, the catch here is that the creditor has to know you are married and has ti decided to come after your spouse. They may or may not do it, but in fact have every legal right to do so as long as the debt was aquired during the marriage.
I am on my handheld boe so I can't attach a link but google bankrupty community property state and google debt community property state and you will see what we are talking about.

thanks, cindy

[Granny]

In a community proprty state, debt is treated just like property, some refer to it as "negative property".

Yes, you can file alone, but the creditors can come back on your spouse to collect the debt if they find out you are married.

You can aquire credit in your name based only on your score but then once you incur that debt, if it is during the marriage then you are both equally responsible and unless you both file bk then you are just transferring that debt to the other party.

Now, the catch here is that the creditor has to know you are married and has ti decided to come after your spouse. They may or may not do it, but in fact have every legal right to do so as long as the debt was aquired during the marriage.
I am on my handheld boe so I can't attach a link but google bankrupty community property state and google debt community property state and you will see what we are talking about.

thanks, cindy

Having lived in Texas all of my life, I totally disagree with you. The only person who can come after a spouse is the IRS and only then if a joint return was filed. Now other states may be different, but not in Texas. My experience is based on my previous marriage and divorce and the previous marriage and divorce of my spouse. The IRS will use both incomes to determine a repayment plan, but that is the extent of it. The catch is to keep the accounts totally separate and not have joint accounts and that may be why we have never encountered any problems.

Even being an authorized user does not obligate a spouse to be responsible for the debt.

The unofficial rule in Texas is: You marry the person, you marry the debt. You divorce the person, you divorce the debt. A spouse has an obligation to support the other spouse but has no responsibility to pay their debts.

If creditors could come after the non-filing spouse, what would be the point to filing alone?

[CindyLou]

By definition a community state is that any property and/or debt acquired during a marriage is the community property of both. I don't know the specifics of your situation, but Texas is a community property state.

[whywhywhy]

“NOTICE TO MARRIED WISCONSIN RESIDENTS”

I'm in WI, and I can tell you that the community property thing is very true here. You share everything in the marriage; the property, and liabilities. It all gets pooled together, even if you didn't want them to. Each person is said to have one half interest in both. ‘Tis why here, if your spouse gets credit in just their name and tries to hide if from you, (sneaky, sneaky!) you get this handy dandy letter letting you know about it and thus enabling you to yell at them with proof!

So, if your husband decides to expand his vast collection of original star wars action figures or your wife her collection of cabbage patch dolls, using a credit card they got on their own and without your knowledge, congratulations! You own half of them and the debt.

That being said, however, I have been told that in bankruptcy situations, where one spouse files, the typical route that the creditors take is to go after only the joint debts. But they can go after the others, and sometimes do.

Sorry, I just had my coffee..