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Bankruptcy and Marriage

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ncsubill

Guest
I live in NC and recently got married. My wife used to work as a Live-In Nanny for a woman for 6 years. They took out several Credit cards in both their names, but with my wife as the primary card holder. The agreement was that the "Employer" would pay all the bills. They accumulated ~$25K debt on the cards and the woman got married and stopped paying on the cards for several months. The accounts have since then been closed and it has ruined the credit of my wife. We have a letter signed by the employer stating that all the debts are her responsibility.

My question is, should my wife declare bankruptcy to free herself of this burden? also, what effect does this have on me and my property. Will filing for Bankruptcy in any way help the situation? Her credit is already ruined.

Thanks
Frustrated and concerned.
:confused:
 


Ladynred

Senior Member
Was your wife a co-signer on the cards or just an authorized user ? As an AU only, she is NOT liable for the accounts, as a co-signer she is.

Filing for bankruptcy will be on her credit for 10 years. It will NOT affect you, personally, except if you have any loans or credit jointly. In that case, your credit will be affected as well. It would also have an impact on any future attempts to get credit of any sort jointly. If your property is in your name only, it is not at risk.

Filing will certainly free her of the debts, IF she's a co-signer, it will also serve to push the responsibility for the debts back onto her ex-employer.
 
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ncsubill

Guest
As I stated in the post, she was listed first on the accounts, so that makes her primary. My only concern is that I have read that they can take Income tax refunds, plus I just sold my house(totally in my name) and I am planning on buying another one (In my name only) with the proceeds and my tax refund for next year.

We are in the process of talking to a bankruptcy attorney, but wanted to get some feedback from this forum first.
 
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ncsubill

Guest
Also, the only possesion in her name is her car. It is a 1997 Nissan altima with $5000 left on the loan. So there is not much equity in it. The only other things of value would be her engagement ring which is worth ~$5000, plus a mutual fund with ~$2000 in it.

Can we leagally cash in her mutual fund and deposit it in my savings account(Totally mine). We do have one joint checking account, but never has any money in it.
 

Ladynred

Senior Member
Transfers of assets is one of the things that is looked at fairly closely by bankruptcy courts, usually for a period of one year prior to filing for bankruptcy. At this point, moving the money probably wouldn't be a good idea unless your lawyer says differently.
The joint checking account would be vulnerable, but you'd report what's in it on your papers. If you don't keep any amount of money in it then you're pretty safe.

Personal property is valued at garage sale prices, and jewelry such as an engagement ring depreciates significantly.. and I doubt a trustee would make your wife surrender an engagement ring anyway ..unless it was worth a LOT more money.

For the car you should also consider its 'quick sale' value, but she can also reaffirm the car loan and keep it if you want to, long as the payments are made the loan company will be happy.
 
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ncsubill

Guest
Thank you for your input.

She has been making ontime payments on all the debt that she feels is hers. ie the car and 1 other credit card.

So I guess, worst case she will lose her mutual funds and the little cash she has in the joint checking account.

We have told the credit card companies what happened, but they don't care. The sad part is her former boss owns her own business and is capable of paying them off if they would just go after her instead. That is why we are considering the bankruptcy, to make her responsible.
 

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