Bankruptcy and Divorce. Seems like they often go hand in hand. One
is left holding the debt, the other the asset. The divorce attorney
can't tell you about bankruptcy and the bankruptcy attorney doesn't
always know how the divorce effects the creditors. I've seen horror
stories. I ran the bankruptcy department for a very large bank. Your
not going to like my advice:
GET A VERY GOOD BANKRUPTCY ATTORNEY.
There are so many variables here that it's worth the extra money.
Start by finding out how the divorce decree treats all of your debts.
Then ask the creditors (all of them) to send you a copy of the
application for all of your debts. Then get a copy of yours and your
husbands if possible credit reports. Get the multiple reports. That
way you will at least know what they (the creditors) know. Very often
the divorce decree will state that the Visa bill is to be paid by you,
but the Visa company is still going after the other party. The other
party says "that's to be paid by her from now on per our divorce
decree" so the Visa bank goes after you. You feeling the presure file
bankruptcy and are discharged of the debt (you think). But wait - The
bank pulls an application on the account, puts the husbands name back
on the account and starts calling him about it again. You and your
husband both get on the phone with the bank and explain that the
account should be the wifes responsibility per the divorce decree -
and the banks response - the application is the contract which
supercedes the divorce decree by having been signed prior to the
divorce decree, and since no agreement with the bank has been signed
since the original application, the bank will hold the original party
responsible in whole or in part. To make matters worse, lets say the
bank ends up filing suit against the husband for the debt after a year
or two (way after your bankruptcy has granted you a discharge), if you
didn't list him as an additional creditor for any unforseen future or
prior debts, he could file a counter suit against you for the same
account using the same reason the bank gave for going after him. This
has happened, successfully I may add. And that's just an unsecured
loan example of why you need a good attorney for this case. Secured
debts, like mortgage debts are even trickier. Not only are they
secured, if the property goes away, that doesn't mean the debt does,
it just simply converts or becomes an unsecure debt, as above.
GET A VERY GOOD BANKRUPTCY ATTORNEY.
Let me assure you. If you walk into a bankruptcy with $75,000 in
equity without knowing what your doing, you could make some bankruptcy
trustees day. Not only is he not bound to take care of your ex's
financial welfare, he is also not bound by out of state relationships.
GET A VERY GOOD BANKRUPTCY ATTORNEY.
I've been to many chapter 7 and chapter 13 meetings of the creditors
where the trustee has taken away the keys to cars, boats and houses,
while unsuspecting, inexperienced and unprepaired attorneys sit with
droped jaws and I with my creditor friends would laugh inside, all the
while knowing that it was the difference between the $700 attorney and
the $2,700 that would have made the difference.
AND BY THE WAY, I HATE ATTORNEYS TOO.
My favorite thing, was firing an attorney that worked for us. It
didn't happen often, but when it did, it was cause for my personnal
celebration. I don't love them, but as my Business Law professor
would say, "If this course teaches you anything, it will be that there
are times when you should hire an attorney". (I learned the same in
Accounting about CPA's.) This is one of those times. Sorry.
To change the subject,
I think way too many people file bankruptcy for the wrong reasons.
They think it will absolve them of debts, help them get a "fresh
start", alow them to start rebuilding their credit, yada, yada, yada.
And in many ways, quite often it is the right choice - and may very
well be the right choice for you -but it's not always the right choice
for everyone.
I've been able to help many people understand why filing bankruptcy is
a poor choice for many people. I'd be glad to go back and forth with
you at my email at John@BenchTeam.Com if you'd like, but esentially
I've found that it comes down to a choice of messing up your credit
for 10 years with a public record that says you filed bankruptcy and 7
years messing up your credit with collection lines saying you dont pay
your bills. Either way, the bank either reports your debt as included
in bankruptcy for 7 years, or reports you aren't paying your debt for
7 years. The difference is the 10 year report of the public record
(the bankruptcy). But like I said, I wouldn't know without knowing
more about your situation.
Good Luck to you. |
