Help! Heading for Divorce...

[uncrunner]

Hello,

My wife has filed for separation and wants to move out of the house. We have $29,000 in credit card debt and we would take about a $22,000 loss on our house if we sold it. Her name is on $24,000 of it (she signed for the cards and I guess I am a cosigner). Anyways my income has been cut by 50% to 65% (I am a REALTOR comission only). Not to sound rude or trying to be free from any blame, but the main reason why we are seperating is because of out of control spending mostly on her part. I have made good money over the last 10 years but we still ended up staying in debt...we have refinanced the house twice to pay off cc debts and I even made the big mistake of taking $60,000 out of 401-K to pay off credit cards. As you can see a pattern of heavy spending. By refi'ing the house we have negative equity.

She now wants me to take the house with the negative equity, split the cards in half, and give her $900/month in child support which I simply can't afford unless I get from underneath the house. Again not trying to sound harsh but I have learned my lesson about spending and am in the process of completely changing my life but she does not want to admit or learn from this and live within her means. I feel that the only way that she will learn and not come to me to bail her out financially is to file for BK. I don't want to ruin her or hurt her. I just don't want to have to financially absorb her lifestyle the rest of my life. Questions:

Question 1: Should I file a Chapter 7 before or after I sign a seperation agreement? WHich way would be most beneficial to me?

Question 2: How will this affect her ability to get an apt or rental home? I want her to be able to b/c we have kids.

Question 3: Should I find an apartment first before I file and they take the house or will I still be able to get one?

Thanks for any input!

[DebtStinks]

Best way would be to do a joint bankruptcy before you guys divorce. I did a few searches and it looks like things can get crazy complex when doing a BK during a divorce or even shortly after.

I'm sure some people that have been though will chime in soon... but yikes not an easy position to be in.

[JoeBankrupt33]

Eek! Sounds like my story. We decided to file bankruptcy jointly before getting divorced. We also foreclosed on our home after we separated, but we both found apartments before that. I was just upfront with the apartments, and they both said that we should rent before the foreclosure (they didn't care that it was 90 days late, though).

I think the most beneficial way to do this is for both of you to file bankruptcy. This way, there will be no division of debt afterward.

[uncrunner]

Thanks DS. The problem is, is that her divorce atty said it was not advantageous for her to file herself or file jointly. She is really concerned that she wouldn't be able to get an apartment or rental home. In other words she doesn't want to own up to any of this mess.

[uncrunner]

I have a fear that she will not want to file jointly and just leave me with it but who knows. How long do you have on average to stay in your home until they force you out after BK? THis is my first day in this forum and I am SO glad I found this place b/c I thought I was gonna have to take this on alone!

[frogger]

Is the house in your and her names or just yours?

[uncrunner]

Joint in our names. $24,000 of the $29,000 in cards are in hers.

[HakunaMatata]

I have a fear that she will not want to file jointly and just leave me with it but who knows. How long do you have on average to stay in your home until they force you out after BK? THis is my first day in this forum and I am SO glad I found this place b/c I thought I was gonna have to take this on alone!

BK and foreclosure are separate processes. While you have the option of surrendering your personal liability to your mortgage loan in BK, your lender will need to follow the foreclosure process dictated by your State. Understanding your State's foreclosure process will aid in establishing a general timeline.

Welcome to the BK Forum! This is a great resource for information and support!

[uncrunner]

Thanks. I will look in my state. North Carolina. Her other reservation about joint filing is because she is afraid the bank will go after her land. Her mom and dad own 30 acres and deeded about 6 to her two years ago. If she files she is worried they will come after it to satisfy the obligation. Is this true?

[JoeBankrupt33]

It is possible that they will want to take the property, but it depends on what it's worth and if it can be exempted.