I want to file Chapter 7 bankruptcy - I am roughly $40K in debt with no job, no assets and no liklihood of personal income anytime soon. My husband is the sole wage earner and all assets are in his name, We have no joint accounts, and all my debt predates our marriage. He cannot afford to pay my debts in addition to our household expenses. I consulted a bk lawyer late last year and was told I couldn't file BK 7 because husband's income (referred to as household income) allowed room for repayment of my debt (which actually isn't true anyway). He told me my only option was bk 11, which would essentially force my husband into paying my debts. We've since moved out of state and I consulted another BK attorney here. He told me that my husband's income was of no matter as long as I don't have enough income to pay off my debts. He said there is no problem filing bk 7 for me and wants to go ahead and draw up the papers. I don't want to have BK dismissed without discharge, or have the court convert a BK 7 to BK 11 involuntarily. Who's right? Thanks Poochie
AFAIK, the entire household income must be counted, along with the entire household expenses even though only one person is filing. I live in a community property state, but I believe this is the same no matter where you live. If the house and car aren't in your name, there's probably not a danger of losing either one. Here's a website to check the exemptions in your current state. http://www.bankruptcyaction.com/bankruptcyexemptions.htm Here's an expense calculator to help you include ALL your household expenses. You should have close to $0 left over at the end of the month to make sure you qualify for a bk 7. If you have too much you could be forced into a 13. Here's where the experience of your attorney is invaluable, as they should know exactly how much can be left over in the district you file. It does vary from district to district. Print out this completed expense sheet and take it to the attorneys you interview. http://www.ca-bankruptcy-attorneys.com/calculators/expense_calculator.html I would recommend calling several attorneys that specialize in bk7 and meet with each of them. Most give the first consultation free, and there should be no pressure to retain one or file immediately. The first meeting is to discuss your options, and answer any questions you have about the knowledge and experience of the attorney who will be representing you. If they all tell you a bk 7 is in your best interests, then I think you'd be pretty safe, and it's just a matter of choosing the attorney you think would be best for you.
Thanks JLynn and SillyLilly I've already checked the exemptions for my state (which is not community property), but SillyLilly you are describing what I'd been told by the first attorney, which is that the entire household income is taken into consideration. My husband refuses to put any more $$$ into my debt, not because he's a jerk but because he's already emptied his retirement and stock (and he's not that far from retirement) trying to take care of my situaition. We moved here to save $$$ and he doesn't want to be forced to apply that savings to Chapter 11 payments. when what he really needs to do is save that money against the possibility of job loss or other disaster (he works in a high risk industry). So anyway, I really like this new attorney, but I want to make sure he knows all the facts and I'm just really confused about why one attorney would tell me one thing and another the complete opposite, when BK is a federal code and only the exemptions vary by state. Thanks you guys. Poochie
Poochie, definitely consult a couple more attorneys before you decide whether to file. In the meantime, try posting your question at the following website. There are some very knowledgeable people over there, many who are in non-community property states. http://chat-cards.com/wwwboard/bankruptcy/messages.html
