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Bad situation - please help!

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What is the name of your state? IA

First, you need a synopsis of the past two years events....
a) 2001... I spent 9 months trying to work things out with my husband of 20 years, including court committing him for his habitual alcohol abuse and participating in his treatment. When that failed (he was sober less than 1 week out of treatment), I filed for divorce. As the only continually employed spouse, I asked for (and received) the house with the 2 mortgages (1 due to his arrest), custody of our 16-year-old son (the other 2 are in college) and $50 child support (because I knew he would not pay it anyway).

b) 2002... I met and married a wonderful man. Three days after the wedding, we were in Santa Fe on our way home from Las Vegas when he had a heart attack. Two days later I took him off life support & he died. He had no will, no life insurance, his only health insurance was because of the company I worked for, he owned 32 horses and a home 3 hours away from my home. I am now administrator of his estate and have since been in a battle with his daughter (his 2 sons are on my side) over his estate (which is insolvent). She thinks there is money that doesn't exist. I have already put $4,000 into this situation in the last year and have received nothing. The last court hearing determined that I will receive the house (which has a mortgage on it) but we have to go to court again before the estate can be closed and I can sell it. In the meantime, I owe $250 + utilities each month, and the attorney fees are stacking up.

c) December 2002 -- I was terminated from my job of 6+ years because of political issues (they used my state of mind from my husband's death as the excuse). I received 3 months severence.

d) 2003 - I met a man, son & I moved into his apartment 3 hours from our home, remarried, still have no job, have $1650 in mortgages plus utilities on 2 houses to pay. My unemployment, along with the cash I drew from the cash value on my life insurance, is almost gone.

e) Now this week... my new husband's ex-wife (divorced about 7 years ago) just filed for bankruptcy. She has a Discover card that they shared when married. She was to have removed his name and paid off the $3,000 balance. She not only didn't do that (they wouldn't because she had never been employed & was living on his child support for their 5 kids + 1 of hers he adopted), but she charged $15,000 more on the card. Now he's afraid he will end up paying for her charges after the divorce. Plus, I found out that he owes almost that much on CCs himself. His gross is about $50k a year, but more than 50% goes to his children (plus driving 3 hours 1-way to get them & take them home each weekend) so he used it to stay afloat while keeping in touch with his kids.

In the last 9 months I've charged about $5,000 on CCs myself. I used them to pay living expenses (& the mortages on the 2 houses (mine & my late husband's) this year to survive on my unemployment & not lose my house.

Sorry for the book, but you needed the whole (convoluted) story to answer my questions... which are...

1) Re: my husband -- How can he keep from paying for his ex's CC debt? Would him filing for bankruptcy do it?

2) Re: my late husband's house -- If I were to file for bankruptcy before the estate was closed, what impact would it have on his house? There is about $26,000 equity in the house but I assume the estate's attorney will attach a lien against the house for his bill, tho, and we don't know how much that is yet.

3) Re: me -- Can I keep the mortgage holder (1 bank has both loans) off my case until the house sells if I can't pay the payments?? Also, how can I get them to stop taking it out of my bank account when I need that money to survive. My new husband doesn't have the money to support all 3 of us, either. He pays the rent, utilities, and part of the food. I have to pay the misc expenses for my son & I. My son has a job now but that only covers some expenses.

Our first priority has to be to determine how to survive on a monthly basis without using credit cards, but we cannot do that with our present payments (interest alone on the CCs is formidable - some at 24.99%). We just don't know how to get those payments to a manageable level with our current commitments.

Please help!!



goodness, you need to pay someone (atty) to read thru your recent life story. get an atty.


Senior Member
Wow.... :eek:

While I would agree that you need an attorney... let me try to address your actual questions.

1 - Yes, if he files for bankruptcy, that will most certainly get him out from under the Discover debt the ex will likely have discharged. Obviously it will also get him out from under the other 15K HE owes too.

I have a question on that though - do you (or he) know when the last payment was made to Discover card ??

2 - The debts of the deceased are paid out of the estate. Obviously your late husband left an estate in at least the value of the house. It is likely that the lawyer will attach a lien to the property, yes. IF you file before that estate is settled, YOUR bankruptcy Trustee will ALSO be interested in the value of the property to sell and will likely make a grab for it. The Trustee may have to wait until everything is settled, but by you filing before it is settled, it becomes part of the bankruptcy estate - which is handled by the Trustee.

3 - The only real way to keep YOUR mortgage lender off your back is to make the payments. Once you default, they can forclose. If you're behind in payments when you file for BK, the lender will likely file for a relief from stay to continue with forclosure proceedings. IA has a 100% homestead exemption, so if you want to keep your house, you'll have to keep up the payments and reaffirm the mortgage.

If you are BOTH going to end up filing for bankruptcy, then stop paying the credit cards now. It'll take 6 months of non-payment before the accounts are charged-off, and the creditors will harrass you in the mean time. Collection agencies will take over after that. You are at little risk of being sued BEFORE charge-off. After charge-off it depends on who you owe and how much. Use the money for credit cards to pay necessary expenses until you file. You'll have to stop using and paying on credit cards for 90 days before you file anyway !

The late-husband's house - if you wait until that estate is settled before you file, the Trustee will likely take the house. Homestead exemption only applies to the house you live in.

Do you think you can solve any of your debt after the sale of that property ? Either way.. the house gets sold and some of the money goes to your creditors.

How do you stop the bank from taking the payment out of your bank account ? Is your bank account with the same bank holding the mortgage ??

Have you asked if the auto-draft can be stopped ?? Have you asked what would happen if you just close out that account ?

Obviously that would mean you have to open an account in some other bank - - and the mortgage lender may not be too happy about that. Check your mortgage papers and find out how far behind you have to be before they declare you in default and start forclosure proceedings. That doesn't happen overnight either - it takes time. I was 6 MONTHS behind before they started forclosure proceedings.. and it took the bank a YEAR to sell it !

You've got a LOT of issues so consulting with a bankruptcy attorney now, to get a feel for all your options, my not be a bad idea.
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