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I am going through a divorce. I am losing my house because it is about 30,000 underwater. I am having to file for bankruptcy because of this plus some other debts.
My lawyers are wanting my wife to file with me because she has about 15,000 credit card debt. My wife and I get along it just isn't working, so this isn't some sort of cutthroat divorce. I have told her I will help her out once my bankruptcy is over paying off her debt. I am trying to tell her that bankruptcy isn't just a get out of debt free card. It is a last resort that if you can avoid it, you really need to.
Am I wrong on this? The lawyers keep telling her to do this. I am telling her not to. I will have a bankruptcy on my credit for 10 years. I dont think it is necessary to have both of us with that on our credit over a "cheap car loan" type amount of debt.
Help me out here. Is there anything I can tell her more to explain why she doesn't want to file for bankruptcy?
One question: can she afford her payments? what is her annual income? If it's under $30k, it will take her FOREVER to dig out from the crushing amount of debt.
I am usually not a BK proponent, but if you are still married and are relatively low income, you probably should filke BK jointly and wipe the slate clean. Depending on the type of BK filed, yes, it can basically make the cc debt go away for good.
It's too hard to answer the question without having more background info, but I guess I don't understand why YOU feel like YOU should get to file & have a clean slate, but SHE shouldn't get to? Did you not own your home together? Did you not have credit cards in both your names?
One question: can she afford her payments? what is her annual income? If it's under $30k, it will take her FOREVER to dig out from the crushing amount of debt.
I am usually not a BK proponent, but if you are still married and are relatively low income, you probably should filke BK jointly and wipe the slate clean. Depending on the type of BK filed, yes, it can basically make the cc debt go away for good.
It's too hard to answer the question without having more background info, but I guess I don't understand why YOU feel like YOU should get to file & have a clean slate, but SHE shouldn't get to? Did you not own your home together? Did you not have credit cards in both your names?
No. Home is only under my name. Credit cards are in only our names.
When my MIL divorced her 2nd husband, he filed for bankruptcy, she did not. They came after her for all his debt - community property, community debt - despite the divorce decree that divided up the debt, she was still responsible. This is most likely why the attorneys wants her to file as well.
What sskkc said. Especially if the debts are in both your names, they will go after her for everything. If she's not financially capable of taking on that kind of debt load all at once, wipe the slate clean. Keep in mind that once divorced, she is only 1 job/income loss away from not being able to pay her bills. Can she keep up the payments if there is a chance she had no income?
Also, if you file BK and choose not to take out all of your debt (assuming those accounts are jointly owned by you), you're running a risk of the judge questioning your intentions or throwing out the BK altogether. Then what?
I think you should file bankruptcy jointly.... you do not need to take all the pain. you probably should file BK jointly and wipe the slate clean. Depending on the type of BK you should hire a perfect attorney.
Don't worry about your future credit. You don't need it, and you don't want it, and that should be pretty clear to you by now. Live in rental housing for the next ten years, drive a used car, don't buy anything unless you have the money for it, and you will be amazed how rich you are in 2021. At least, you won't have negative net wealth.
As for the morality of bankruptcy, you have probably already paid more than the amount of your debt, in interest, fees, penalties and late charges over the life of your loans. They have their money, or rather, they have your money. Start keeping it yourself.
Get it over with, start the rest of your life at zero, and spend less than you earn. There's nothing wrong with having a friend for an ex-wife.
By the way, the first week after your bankruptcy, you will get about 100 credit card approvals in the mail. They take great comfort in the knowledge that you can't stick them with bankruptcy again for the next seven years, and now they like their chances a lot better than they did before. Don't let them back in the drivers seat of your finances.
I agree with jtur's take. The divorce should be looked at as a business transaction. Both of you should file together and start over with a "clean" slate. Neither of you need to be living with any sort of "credit" or debt mentality again, at least for a very long time.
Don't worry about your future credit. You don't need it, and you don't want it, and that should be pretty clear to you by now. Live in rental housing for the next ten years, drive a used car, don't buy anything unless you have the money for it, and you will be amazed how rich you are in 2021. At least, you won't have negative net wealth.
As for the morality of bankruptcy, you have probably already paid more than the amount of your debt, in interest, fees, penalties and late charges over the life of your loans. They have their money, or rather, they have your money. Start keeping it yourself.
Get it over with, start the rest of your life at zero, and spend less than you earn. There's nothing wrong with having a friend for an ex-wife.
By the way, the first week after your bankruptcy, you will get about 100 credit card approvals in the mail. They take great comfort in the knowledge that you can't stick them with bankruptcy again for the next seven years, and now they like their chances a lot better than they did before. Don't let them back in the drivers seat of your finances.
Fire them and find new attorneys. Bankruptcy attorneys are a dime a dozen.
Also, your, um, slate is wiped clean only if your income is less than the median income for one person in your state.
In other words, you DO NOT automatically get a Chapter 7 (which is the only one that discharges debts without you having to pay).
If it isn't, you'll have to make payments for 5 years before your bankruptcy is discharged.
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