My husband's business went under. We had a lawyer who worked out a settlement with the major accounts . My husband is filing bk 7 because of a few accounts who would not work something out. I don't have to but I have very bad credit as a result. My credit is 534 with about 5 chargeoffs, I have a 19,000 write off from a bank we settled with. My settlement agreement shows they can't collect on this. We have to sell our home because of our now lower income. What is the best route for me to take in order to be able to buy a house in the next 3 years? Should I file, try to clean it up, or just wait awhile.
Personally, I'd ride hubby's coattails in the chapter 7. One of those 5 charge-offs is likely to sue you. Unless you're sure you're going to be in a better financial position so you can settle when they do sue, I'd just get it over with so I could start building credit again.
The accounts are all fairly low amounts that I could pay, except for an autorized user account. How much luck do you think I will have negioating tradeline removal for the money and getting authorized user removed.
Have you hubby remove you as an authorized user, then you should be able to just dispute it away....you have no financial liability for the account. Before I did that (because I know little about BK), since it sounds like your hubby does have the liability, check with the attorney to make sure that it wouldn't be considered a preferential payment (a big no no)
jlynn has hit the nail on the head here. The dates of your hubby's settlement and your settlement might preclude you from doing a bk 7. There is the 90 day rule and then there are more rules about "preferences". You can find it in Title 11 U.S. Code Section 547. You cannot make deals with some creditors and then bk others. It IS a big no-no. A competent bk atty should be consulted to see if either of you due to these settlements would qualify for a bk 7. clc
Ok, I was assuming since you were thinking about bk'ing the charge offs that you couldn't pay them. Since you can, that changes the picture. In this case, I wouldn't bk with hubby since it would mess up your credit longer than dealing with the charge offs. As for your hubby's settlements, they shouldn't affect his filing bk at all. The trustee may recover the payments he made for distribution to all creditors, but it was not wrong of him to pay them. Here's a website with that info. http://www.moranlaw.net/preferences.htm
I don't think I was inferring that what hubbie did was wrong (meaning illegal) I merely said that the settlements could be construed as "preferential" which is a bk 7 no-no...it does not preclude them from filing bk 7 but it will mean the trustee will get the money paid preferentially back into the bk estate in order to pay the creditors according to their standing in the bk 7. If that happens then all the money paid to an atty to make these settlements will have been wasted. The settled creditors could have put language in their settlement agreements that would give them higher standing. At worse they could file a dispute in the bk 7 which would mean it could go to a hearing which means higher bk atty fees. When people are faced with a financial situation where bk is the only option they need to do their homework and pre-plan. They have to be careful what they charge and who they pay...especially in the 90 day window period. If it is an inside transaction (like the loan from Aunt Millie for example) then the window is 1 day over a year. BTW the site that was referenced said "under CA law" so if you don't live in CA then it does not apply. But other than that it is a good reference on what is and what is not a preference in a simple way. Section 547 of the Bankruptcy code is complex. It takes a lot of practice to fully understand what is a "preference" and what is not. clc
