Newbie needs help

[uptomyears]

I've been lurking here for a couple weeks now and have several questions that I can't seem to find answers for. Due to the economic downturn, I have made the decision this week to close my struggling 2 year old small business. Business started failing in Aug. 08 and I had to put monthly expenses on personal CC on top of considerable debt just to keep the doors open.. Now with $40K in Credit card debt, and about $20K business expense debt which is all personally guaranteed by me. I see the only option is to file chapter 7.

All of this debt is in my name only. But retired hubby also has cc debt for $30K Most of the cc debt is interest on top of interest all those 4% for lifes and the teaser rates went from affordable payments to gosh we're in trouble rates. I just got a letter from Chase, since they took over WAMU, my interest rate is going from 18% to 31%. How is this fair? Or don't they really expect to get paid and get this off the books?

All of our bills today are current but that won't be the case next month when I stop paying on my credit cards. I do not want to include my husband on my bankruptcy. Basically the only debt he has is the CCs and our home mortgage with only $30K left to pay in 3.5 years. House worth about $100K. This is his family home and I am not on the deed. Loosing the house is not an option. Our only income is pension income. $47K year. We have 2 cars paid off worth about $5k total. Our means test for me filing single married is within the limits using the household income guidelines and deductions. Actually, our disposable income is -1700 per month if the calculator is right.

My question. Am I a no asset case in Pennsylvania if our only income is pension income and I'm filing alone?
After I file and discharge can he do a Chapter 13 to restructure or renegotiate with the card holders? I hear they are really giving good deals. Is there an advantage to this?
I'm sorry, I have so much going on in my head. I have so many questions. I have not talked to an attorney yet, but will be soon. Just looking for answers.
Anybody out there in PA that has been through this? What can I expect?

[TEW]

you would be a asset case. that house is 50% yours
take a look at the pA exemptions.
http://www.pennsylvania-bankruptcy.com/fed.html

[uptomyears]

Is PA a community property state? This is what is so confusing. This is a second marriage, house has been in the family for over 50 years. deed and mortgage is in his name only. I don't even get it by will if something happens to him his kids get it. Could someone please explain this to me?

[TEW]

I filed in PA the house was in my name the loan was in my name. The house is property of the marriage.
The lawyer explained it this way. She lives in the house and has financial interest in the house it's her house...
And by the way the KIDs come after you.

[BnkrptcyLwyr]

Alright, first, Pennsylvania is NOT a community property state.

I think that Michigan is the only state where dower is the law anymore.

She clearly stated that she is NOT on the deed.

I find it VERY HARD to believe that Pennsylvania law would say that the house is half hers. If the house was acquired prior to marriage by the husband, then it should not be hers at all.

Just because she might be able to inherit it later, does not mean she has any sort of present interest in it.

The rules regarding property trace back to medieval times in England and are ancient, complex (and archaic) and the history of property rights development is fascinating. It is not simply a matter of "because you are married and get a benefit you own half."

I think that you will be alright.

Having said that though, I think that if you have "$1,700" in disposable income you may not be filing a Chapter 7. You will want to consult an experienced attorney to make sure that you do the right thing and get good info.

[Tbornetun]

I agree with above post regarding the house, it is not her asset.

BKLawyer, her DMI is negative 1700.

[uptomyears]

When we married 9 years ago, we made our wills. I came into the marriage with no assets. Just the clothes on my back. The wills are irrevocable unless both parties agree. In the event that he dies before me. The kids get the home/property but I get life use unless I surrender the house to them voluntarily. It was also explained to us that in the event that I die first, he must get life use of the house from his kids. The kids would never do that to him, but thats the way it reads. The reason we did this is to protect his daughters home that is located on our property. She owns her house, but he owns the land it sits on. I don't have any financial interest in the home. I have never worked outside the home except for this business I started which was only in my name. His pension check is our only source of income including what he loaned me to put into the business. I'm very embarrassed that I have put him in this situation. When I started my business the economy was a whole lot different. I wish I knew then what I know now.

[BnkrptcyLwyr]

I agree with above post regarding the house, it is not her asset.

BKLawyer, her DMI is negative 1700.

Oops ... you're right. No problem then it would seem.

However, just because you pass the means test DOES NOT mean that you're out of the woods. The US Trustee can ALWAYS file a motion to dismiss under the "totality of the circumstances" test. Although, when the number is that far negative ... you're probably fine. But even a high negative number can be deceiving ... for example, you could be excluding a substantial amount of income because it's social security, or something like that.

Still always want to see if Schedules I/J match or are close.

[BnkrptcyLwyr]

When we married 9 years ago, we made our wills. I came into the marriage with no assets. Just the clothes on my back. The wills are irrevocable unless both parties agree. In the event that he dies before me. The kids get the home/property but I get life use unless I surrender the house to them voluntarily. It was also explained to us that in the event that I die first, he must get life use of the house from his kids. The kids would never do that to him, but thats the way it reads. The reason we did this is to protect his daughters home that is located on our property. She owns her house, but he owns the land it sits on. I don't have any financial interest in the home. I have never worked outside the home except for this business I started which was only in my name. His pension check is our only source of income including what he loaned me to put into the business. I'm very embarrassed that I have put him in this situation. When I started my business the economy was a whole lot different. I wish I knew then what I know now.

Ok, because this is a will, then your interest does not arise until death, if it arises at all. At your husband's death is when the "expectant interest" becomes a "present interest." And not a day before. At least, that is the general rule, and that rule is generally adhered to. I do not practice in PA, so make sure you clarify with your attorney (but I have a very high degree of confidence). And if your attorney says anything else ... go get the second opinion of a credible estate attorney.

[Tbornetun]

Ok, because this is a will, then your interest does not arise until death, if it arises at all. At your husband's death is when the "expectant interest" becomes a "present interest." And not a day before. At least, that is the general rule, and that rule is generally adhered to. I do not practice in PA, so make sure you clarify with your attorney (but I have a very high degree of confidence). And if your attorney says anything else ... go get the second opinion of a credible estate attorney.

I agree and her interest, even in that event, would only be the USE of the home. A free place to live, nothing more.

[uptomyears]

While I was typing there were a couple of comments. Yes means is negative 1700. I haven't figured out what his means test results are without my debts. But that eliminates $970 a month in minimum payments not including what my business debts will be in collections. One of my original questions was: Could he file chapter 13 to reorganize his debt after my debts are discharged since letting the house go is not an option?

[Tbornetun]

Depending what the homestead exemption is in your state, he may not need to file a 13, you could file a joint Ch 7. Are you sure that with the current home values being where they are that the house and land is worth what you think it is? Just a thought, you may want to look into it.

[TEW]

Alright, first, Pennsylvania is NOT a community property state.

I think that Michigan is the only state where dower is the law anymore.

She clearly stated that she is NOT on the deed.

I find it VERY HARD to believe that Pennsylvania law would say that the house is half hers. If the house was acquired prior to marriage by the husband, then it should not be hers at all.

Just because she might be able to inherit it later, does not mean she has any sort of present interest in it.

The rules regarding property trace back to medieval times in England and are ancient, complex (and archaic) and the history of property rights development is fascinating. It is not simply a matter of "because you are married and get a benefit you own half."

I think that you will be alright.

Having said that though, I think that if you have "$1,700" in disposable income you may not be filing a Chapter 7. You will want to consult an experienced attorney to make sure that you do the right thing and get good info.

Mr BKlawyer I just sold the house in PA I owned the house before we were married. My wife has financial interest in the house she in initialed to 50% on the increase in equity since the day we were married. Before we filed I had remortgage the house I could not close that loan with out her permission. I could not sell the house with out her signing the deed possibly I had 2 tattle companies that were mistaken?

[Tbornetun]

For her to have needed to sign the deed she would have already been on the deed. The OP is NOT on the deed for the husband's house.

[uptomyears]

Thank you. I thought I had made it clear from the beginning, I don't have an interest in the home. However, I just did the means test for my husband alone using ordinary income and not pension income. I come up with negative (954) Yes he probably could go chapter 7 with me but being the man he is, he will opt for chapter 13 and pay the debts over time or bite the bullet and just keep paying these banks that are not consumer friendly. Keep in mind. The original amounts were not that high until these cc banks started changing card holder agreements about 4 years ago and upped the interest rates from between 4 and 8 percent to 23 and 31% even though there was never one late payment on any of them. The debt has trippled over the last 4 years. These cards have not been used in years. And most of them were balance transfers to 4% for life. Well that didn't happen. One of the cards has $2300 on it. The payment is $281 a month. What's wrong with that picture? The balance never goes down.