First Step?

[Tank]

Here is my situation, I hope you all will have some positive advice for me in what direction to take.

When I met my wife about seven years ago, she was getting out of a bad relationship with her former partner, who left her with over $20,000 in credit card debt. Five years ago we were married and two years ago we bought a house together.

About a year and a half ago I lost my job and haven't found work since. I suffer from depression that has gotten steadily worse. During the intervening time, we have managed to accumulate $75,000 in credit card debt because of my lack of vigilance, not to mention a mortgage and a home equity credit account.

My wife and I have begun discussing options to manage/reduce/eliminate this debt before it gets any worse. We have discussed getting a divorce and my filing for Chapter 7. Nearly all of the credit card debt we have are in accounts under my name and consist of balance transfers from the account we regularly use (also in my name).

I am at a loss at what to do next. I know I have screwed up big time but it doesn't change the fact that I have a pile of bills on my desk waiting to be paid and no clear plan on how to do that.

Thank you for any assistance you can offer.

Tank

[JollyGG]

Is the only reason you are considering divorce - so that you can file alone?

You do not have to get a divorce to file in only your name. If the debt is in your name only you can file individually even if you are married. It just makes the means test a little more complicated.

[BKTango]

Welcome to the forum!

I'm sorry for the troubles you are going through. At some point and time each of us here have gone through something. So, we can offer you advice, support, and the occaisional sideline target for some ranting and venting lol.

Most people agree it is easier to get divorced first, and then file bankruptcy as you have a seperation of finances at that time. But.....here's the big but...you and your wife need to sit down and decide on what you want. Is your marriage worth saving, or is it too far gone? I only ask this because I've been there. A few years ago my DH and I were at the end. Too much debt, too many problems stemming from debt and money troubles that just made us miserable. We eventually turned that misery towards each other. Then one day, out of no where, we just stopped and ask ourselves what the hell we were doing. We were best friends, and here we were hating each other and about to walk away....all over debt and money. So after we picked ourselves up, slapped ourselves into reality, we worked on the marriage first. Then we tackled the debt, in the end BK was the only logical choice. No regrets. No worries. We have both come to realize what is most important. It's not the same for everyone. For some people it's best to go ahead and part ways as there as been too much damage done. But for us, we look back now and laugh and cry at how dumb we were and how close we came to losing it all.

So you gotta ask yourself....what do you want? Ask your wife what she wants. With those answers, you take your second step in this journey.

From and outsider looking in, I would suggest you both sit down and have a good look around. Talk it out. Make a decision, walk away or be a team. Whatever that decision is, maybe see a doctor, counselor, clergyman or even friend to talk things out with and you need to get help you for your depression. Bankruptcy would probably be a financial fix for you and your family, but you need to decide if you both want to do this together or walk away.

[BKTango]

I rambled on and completely got off track of answering part of your post....

You could probably benefit from reading through posts on this forum and learning as much as you can about BK to releive you from some of the questions you may be wondering.

Also, you might want to set up 3-4 free consultations with some BK attornies in your area. They will give you a generally quick idea of where you stand and answer a few questions for you.

If after going through all the decisions, questions, and doubts, if you decide to file stop paying on any unsecured debts, such as the credit cards, use that money to pay for necessary living expenses, or a lawyer. Be sure to keep paying on any secured loan (home, car, etc...) especially if you intend on keeping the home and vehicles.

And Jolly is correct, you do not have to get divorced to file alone. If you were thinking along those lines.

[Tank]

Thank you to everyone for your kind replies. I am currently looking for a lawyer(s) in my area (Southern CT) so I can get the ball started rolling and hopefully start being a little less confused about all this.

One more quick question/clarification:

I mentioned earlier that most of the credit cards are in "my name"...as in, the person that the bill is addressed to is *me*. Some of these accounts I had a card issued in my wife's name...does that legally attach her to the account in any way or are they still my sole responsibility?

Nearly all of our credit card accounts were utilized for low interest balance transfers...I don't even have cards for some of them anymore

Thanks again for all your advice in pointing me in the right direction to start. The information on the site has thus far proved not only voluminous, but also quite helpful (the FAQ is awesome!)

[lrprn]

I mentioned earlier that most of the credit cards are in "my name"...as in, the person that the bill is addressed to is *me*. Some of these accounts I had a card issued in my wife's name...does that legally attach her to the account in any way or are they still my sole responsibility?

What matters is not who the bill is addressed to....it's whether your wife is an authorized user or a co-signer on any of the cc cards.

If she's an authorized user, then she is not responsible for repaying any of them if you file. However, if she is a co-signer, then if you file alone, she will be held responsible for paying the debt in your place. It's important to find out where you wife stands on every single card you intend to include before making any assumptions.

Of course, if you and your wife end up deciding to file together, then none of this matters.

[Tank]

I can't be 100% sure until I actually talk with the CC people, but my initial thought (assumption, I know) is that my wife *isn't* listed as a co-signer, merely as an authorized user. Generally when we got good CC offers we would both sign up and get our own accounts and thereby get twice the buying power (lucky us).

Which does raise an added question...since most of these CCs were used for balance transfers, how hard will they look at the accounts where the money was transfered from? I would assume a company might cry "fraud" if I transferred money from an account in my wife's name into one of mine...which I am sure I probably did at some point...but I wasn't being intentionally fraudulent...just trying to use the best interest rate.

[lrprn]

...since most of these CCs were used for balance transfers, how hard will they look at the accounts where the money was transfered from? I would assume a company might cry "fraud" if I transferred money from an account in my wife's name into one of mine....

Again, if you are the only one filing, then the answer depends on when you made the last transfers to one of her cards and how much they were for. This is a great question to ask during your free consultation visits with several bk lawyers in your area.

[Tank]

My goal is to separate out my debt from my wife's so she doesn't have to file at all. My quick goings-over of out budget during the last few days leaves me with the impression that were it not for all of my credit card debt, my wife would be able to make ends meet on her current salary. Since we are still early in the process and don't yet know all the pertinent information, I'm not sure if my goal is a feasible one or even a reasonable one.

In any event, thanks for the continued help/advice/support.

[SinkingFast]

Most attnys have you do it anyway,.......... So why don't you go to http://www.annualcreditreport.com and pull both yours and your wife's Credit Reports from all 3 agencies.

It's free. You're entitled to a copy from each of the 3 agencies once a year.

Your Credit Reports will show if either of you is Joint (a cosigner) or an Authorized User on all of your accts.

[Tank]

Well, I have an appointment tomorrow with a BK lawyer. I spoke briefly with him on the phone and his initial impression seemed to be that I would be a good candidate for Ch 7, even with the complexities of filing individually from my wife.

I did also find out that my wife is not listed as a co-signer on any of my credit cards, so that's a positive working for me at this point. I have had a few cash advances which I used to try to keep us afloat, so I am a bit worried that that is going to negatively impact my filing. Guess I will find out tomorrow. I'm also trying to figure out a budget with limited success to try to keep what money my wife is brining in to keep us afloat.

SinkingFast, is that credit card report actually free, or do they make you sign up for some kind of credit protection? From what I saw of the site it looked totally free and legit. Just wanted to make sure there are no surprises.