question about disposable income...

[osu76]

My wife is thinking about filing for bankruptcy (chapter 7). We have a really strict budget so that we could pay down our debt, which has failed.

She has 40k in cc debt and I have 25k in cc debt. She doest want me to file so that one of us still has good credit. Currently my min payments are roughly $600 per month. When doing our expense/budget on the schedule J(i think it's j) do we count my minimum payment as an expense? If only she is filing?

My main issue is we would have enough money to pay down my debt, but not hers. Would chapter 13 be better? we have an appointment setup with our first attorney coming up so they should be able to help us out, but we are struggling with the decision on just her filing vs both of us filing.
thanks in advance for any comments/info.

[lrprn]

When only one spouse files bk, the gross income from the last six months before filing of the spouse that doesn't file is added to the income of the spouse that does file. Then the amount that the non-filing spouse does *NOT* consistently contribute to the running of the household is subtracted out later on the filing forms.

Does your cc payment include rent/utility payments, groceries, clothes purchases for your wife and children (if you have children), etc. - things that can be considered as contributions to the household?

[osu76]

When only one spouse files bk, the gross income from the last six months before filing of the spouse that doesn't file is added to the income of the spouse that does file. Then the amount that the non-filing spouse does *NOT* consistently contribute to the running of the household is subtracted out later on the filing forms.

Does your cc payment include rent/utility payments, groceries, clothes purchases for your wife and children (if you have children), etc. - things that can be considered as contributions to the household?

My credit card usually gets used for some groceries, but it's maxed out so we only use it when it's needed. Also my wife is a stay at home mom so she doesn't have any income. How does that come into play? We have done the means test and we are below the average income in Ohio. We have a budget that seems to give us enough money to pay off my debt without me filing, but that confuses me with the disposable income. Thanks for the reply.

[lrprn]

Also my wife is a stay at home mom so she doesn't have any income. How does that come into play?

Since your wife doesn't work, that means that when she files alone, a large portion of your income will count into her Means Test income determination because you are completely supporting the household with your income.

It's hard to know without more information than you've given us here, but if your wife is considering filing bankruptcy alone as some kind of stop-gap measure, it might not be enough over the long haul. Chances are if you are both struggling financially now, it might be better to both file and get a real fresh start. Most couples end up reversing the effects of filing within 2-3 years by maintaining a spotless credit payment record.

Discuss your wife filing alone vs. you both filing together with at least 3-4 experienced bk lawyers in your area before deciding what's going to work best in your situation in the long run. Most have free initial consultations. Bk lawyers are not created equal. Get those opinions first, then decide what to do.