Get divorce so spouse qualifies for ch 7 - would this work?

[Loki]

I am happily married. She has almost all the debt. We do not qualify for ch 7 because of my high income. We have seriously started considering getting a divorce which will allow her to file ch 7 individually without my income. We can always get re-married. I know this sounds crazy, but would it work??

[Loki]

Get divorce so spouse qualifies for ch 7 - would this work?

We are happily married but she has massive amount of credit card payments. We were thinking of getting divorced, allowing her to file an individual chapter 7 bankruptcy not including my income. We can always get re-married. Would this work? Any possible drawbacks? I know this sounds crazy, but would it work? I appreciate everyones feedback

[busbis]

not crazy at all. I am currently in a 13 and keeping my fingers crossed that everything turns out because I am surrendering 2 properties. If something happened and they came for the definency balance after sale, I too have thought about getting divorced to qualify for a 7. Sounds crazy, but why wouldn't it work?

[rilbrianne]

It's a crazy idea I don't know if divorce is a good idea to get your income out of the worksheet. Besides, when you put your income and hers on the schedules, your incomes will go towards expenses and will zero out anyway - well that actually depends on how much you get and pay... why divorce?

I guess if it works for you, that's great but is it not possible that she file by herself?

[Loki]

Yes, she could file, but..

If my spouse filed bankruptcy by herself, they would consider my income as well, and she would then 'not' qualify. If we get divorced, however, my income will not be considered.

[kiddles]

If you divorce, but still live together, your income still counts. If you are married but not living together, your income can be "backed out" on her schedules.

Consult a BK attorney!

[magyar123]

Depends how many months after you file for divorce the divorce becomes effectivefinal. Here in California it is 6 months. Say you file for divorce on Monday, Januay 7, until July 7 you are still officially married. Depends on your state's laws.

[lrprn]

Loki, I merged your two threads into this one. It's best to keep all your responses in one location. There's no need to post the same question in more than one area in this forum. Thanks!

[FreshLikeADaisy]

Loki, do you live in a community property state? If not, filing on her own is probably a realistic option, and a divorce not necessary. But you'll want an attorney to sort this out for you either way: filing alone when you're married is not a straightforward thing, as you've already figured out. Good luck to you!

[Loki]

Yes, we live in California, a community property state

I appreciate everyone's responses. It appears that getting a divorce will allow her to exclude my income when she does file for Chapter 7.

[Loki]

Forgot to mention

All of her debts are her debts. The credit cards were acquired before I met her. She did, however, make charges on them when I was with her. Not sure if that is relevant or not.

[JollyGG]

If my spouse filed bankruptcy by herself, they would consider my income as well, and she would then 'not' qualify. If we get divorced, however, my income will not be considered.

They would add the amount you contribute to the household. So for example

She makes 1k per month. You make 2k per month but, since you have your own expenses such as work lunches, your car payment, your own credit cards you only contribut 1k to the household.

You take her 1k plus the 1k you contribute to the household and then subtract out the mortgage and other household expenses. Hopefully leaving her able to file a chapter 7.

Someone correct me if I haven't understood this correctly.

I would strongly recomend talking to 3 or 4 lawyers and see what they say regarding options for her to file singly while you two are married.

[lrprn]

All of her debts are her debts. The credit cards were acquired before I met her. She did, however, make charges on them when I was with her. Not sure if that is relevant or not.

Trust me....it's VERY relevant. Because you live in a community property state, you owe half the debt that she charged on the cards while you were married and didn't pay back.

Please, PLEASE set up appointments for free or low-cost initial consultations with 3-4 bankruptcy lawyers in your area as soon as possible. You are making very important decisions that will affect the two of you for the next ten years. You need to make these decisions with sound legal advice, not your assumptions of how you think things will work. Get going!

[FreshLikeADaisy]

Loki, lrprn is right -- that whole community property business really complicates both a bankruptcy and a divorce. I don't think you can sort this out informally without an attorney.

I will tell you this, though: do NOT tell the attorney upfront that you are thinking of divorcing for the sole purpose of getting through bankruptcy. It is a fact he would have to hide from the trustee, and it might come up when the schedules clearly show you still living together, putting him in a weird place (not to mention the divorce attorney). If he thinks he might have to lie for you on down the road he probably won't want to help you. Let him know that you and your wife are thinking of amicable divorce, and it could be sooner or later depending on what is best for you both in terms of the bk, but don't let on that you're doing this *solely* for the bankruptcy and may even remarry after the bk is discharged and closed. I have a feeling it could be considered fraudulent and get your bk kicked out. You don't have to explain WHY you're getting a divorce to either attorney; if asked, it's just not working out. They'll just be grateful you're not re-enacting that movie The War of the Roses in their waiting room.

Like lrprn said, get going!!! Good luck!!!

[Lindsay]

How much debt are we talking about? It seems like alot of trouble to avoid a Chapter 13 unless the debt is huge. I'd definitely talk to several lawyers. You could mention to the lawyer that this debt is putting a terrible strain on your marriage and ask how a divorce would affect a chapter 7 bankruptcy. Would you have to live apart from your wife for a certain period after the divorce?