separated from husband--will I be efected?

[anyuta]

I have separated from my husband, although we do not at this point have a property settlement or any other formal separation agreement.

He is bipolar, and has in a manic spree bought a bunch of stuff on credit which we can't afford (this is why I asked him to leave). He is now stable, on medication, and realizeing what he's done. he has no job, he was a SAHD. now he has all these debts. all in only his name. but, we are married. the house is only in my name, and I have other debts and assets which are solely in my name, too. the only joint thing we have is a car and a checking account (which I no longer deposit to).

he wants to claim bancruptcy. I am concerned that, because we are still legally married, I will be responsible for his massive debts. I mean, one thing he did was purchase, on credit, a VERY expensive car, which he can't afford, and neither can I. he's been in a psychiatric hospital, right after he bought this car--and that's when I told him not to come back.

Please, someone, let me know if in the state of VA my assets, held only in my name, can be forfited in any way for HIS bankrupcy. He does not want to do anything to hurt me financially (he hopes for a reconciliation). so if I tell him to find another way, he will, but I would like to know the facts. thank you in advance for any info.

 

[anyuta]

forgot to mention

up to now, we both have flawless credit histories. no black marks at all. the only reason he is considering bankrupcy is that now that I am not supporting him, he has no income, and even if he did have income, his earning potential is such that he couldn't possibly pay off all the debts he accumulated during various manic episodes--certainly not the brand new, fully loaded Cadillac SUV!!! wasn't sure if that makes any difference at all, but thought it might.

 

[Ladynred]

Even though you are married, one spouse can claim bankruptcy without affecting the property and assets of the other, as long as those assets are completely separate.. and it sounds like yours are, with the one exception.

Does the car have an outstanding loan against it ? If he claims bankruptcy he can reaffirm the car, but the payments would have to be current. If he defaulted on the loan afterwards, the creditors would come after you for the money if you wanted to keep it.

Basically, YOUR assets will remain YOUR assets. VA exemptions are fairly generous so that anything he could claim could most likely be exempted any way. Here's a link to the VA exemptions:
VA exemptions .

Note that any unused portion of the homestead amount can be applied to personal property. Since the house in only in YOUR name, therefore he has nothing to show as equity, I believe then that he could use the entire $5000 to exempt personal property (correct me if I'm wrong here Sr. Members). The vehicle exemption in VA is $2000, so if your joint car is under that (again, think quick sale value) and not financed, you can probably get it exempted too.

Personal property is then valued at 'garage sale' prices, so try to think in those terms when you start adding up the value of personal property.

Since you no longer deposit to the joint account, you don't stand to lose any money there either, but you might want to consider taking your name off the account all the same.

Hope this helps a little

 

[nailtech]

I'm thinking if the house was purchased during the marriage and if VA is a community property state,... it may affect the house no matter who's name the house is in... if he's holding a value in the house that is... it just may not affect her credit if they have no joint accounts together... which they do have one from what I read... but thats just my thinking...

 

[Ladynred]

Well, VA is NOT a community property state, so she's ok there.\

The only community property states are: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington.

 

[anyuta]

thank you!

the "joint" car is really mine. I have the loan on it, and I am paying it. I actually intend to pay it off with some money I got from insurance on a car that he totalled recently (which was mine, and was paid off). So, there will be no loan on that joint car, but the title will still be in both our names. I was hoping to trade it in and get a car in my name alone, however for various reasons that may not be possible. I will look into the possibility of just getting him to take his name off the car. the loan is only in my name, I think, unless there was some need to put his name on it since the car is registered under both of our names.

It sounds like I am pretty safe. He has no property whatsoever (I mean, besides clothing and the darned cadillac SUV). so he has nothing to exempt.

all that debt he has ie either in the financing of that darned car, or else in credit card debts. so, if he files bankrupsy, and has no job, what does that mean? that he won't owe anything on the credit cards anymore? that seems like a rather sweet deal for him, given that he has no assets for them to take away (except that car). is this really possible? it seems too easy an answer. there must be a catch somewhere. bad credit rating? well, good. it might keep him from getting back into debt!

but, as long as I am not impacted, I suppose I don't really care if there is a catch or not. the only reason I wish to be involved in this process is the possibility of it having impact on me, particularly my house, furniture, and any other assets I might have (not much, really).

Thank you again.

 

[Ladynred]

The whole point of Chapter 7 banruptcy is to get a 'fresh start', so yes, all debts are wiped out once the discharge is issued. In some ways, it IS a sweet deal. It DOES have an impact on your credit for a long time though. It will stay on his credit report for 10 years. Getting credit again actually isn't difficult, but credit cards are usually secured (meaning ya gotta have money on deposit to back up the card), and loans, while not impossible to get, will carry horrendous interest rates for a few years after the discharge.

If he cannot reaffirm his SUV, which means his payments would have to be current and he would have to agree to continue to pay, and on-time, then the SUV will be repo'd. If he's unemployed, he's not going to be able to do that, so kiss the Caddy good-bye !

If the loan on the car is only in your name, I don't think that it will be affected at all, even though its registered in both names.

"Household" income is listed in the bk forms, but it also separates out how much of that belongs to the other spouse (if I am remembering correctly).

Good luck !