Question Can I put my wife's debt into my name--then declare bankruptcy?

[Wilhelm]

Hi, all.

New to the forum. I had an at-fault motorcycle accident. I was taken to a country hospital. The doctor said, "This guy needs to be airlifted to our main unit." So, I was airlifted. Now, the helicopter company is billing me for 48 grand because they don't contract with any insurance companies. The insurance company only paid a little bit. We are currently trying to get a lawyer to see if there's anything that can be done. No lawyers have called us back, yet. So, there is a very real possibility I will declare bankruptcy.

My question: I have fair credit card debt--about 10k. I have several cards with high limits with no debts on them. All my cards are in my name only. They are NOT joint accounts. My wife has about 37k in credit card debt. Many of her cards are in her name only. Can I transfer her debt from her cards to my cards, then discharge all that debt through bankruptcy, in addition to the medical debt?

[justbroke]

First, Welcome to BKForum!

Moving certain debt around can be problematic when doing so has the affect of helping an insider; your spouse is certainly an insider. The lookback period for insider preferences is longer than regular preferences.

Your hypothetical -- moving your wife's debt by transferring the balances to your cards -- poses a good question about an insider preference. The preference could be that the insider, your spouse, benefited from you doing the transfer in order to discharge that debt. It could also be seen as a fraudulent conveyance (the word "fraud" used in this is not criminal fraud).

You should definitely consult with a bankruptcy attorney before you do anything with the non-filing spouse's debt. I can't personally see that your hypothetical would be allowed. Otherwise everyone would just transfer debt from an otherwise solvent spouse, to the insolvent spouse and discharge all personal (and perhaps marital) debt while preserving the credit of the non-filing spouse.

But that's my opinion on this. I'm hope that others will chime in.

[Wilhelm]

First, Welcome to BKForum!

Moving certain debt around can be problematic when doing so has the affect of helping an insider; your spouse is certainly an insider. The lookback period for insider preferences is longer than regular preferences.

Your hypothetical -- moving your wife's debt by transferring the balances to your cards -- poses a good question about an insider preference. The preference could be that the insider, your spouse, benefited from you doing the transfer in order to discharge that debt. It could also be seen as a fraudulent conveyance (the word "fraud" used in this is not criminal fraud).

You should definitely consult with a bankruptcy attorney before you do anything with the non-filing spouse's debt. I can't personally see that your hypothetical would be allowed. Otherwise everyone would just transfer debt from an otherwise solvent spouse, to the insolvent spouse and discharge all personal (and perhaps marital) debt while preserving the credit of the non-filing spouse.

But that's my opinion on this. I'm hope that others will chime in.

Good points, all. Thanks for the info. And thanks for the welcome.

[despritfreya]

With all due respect, you want to "transfer" your wife's $37,000 of debt onto your credit cards and then discharge your new debt in your bk? Sounds like fraud to me - load up on credit cards knowing you have no intent to pay the debt.

I recommend that you talk to a bk attny and, if appropriate, your wife files with you.

Des.