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socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 37814
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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My husband has no other options than to file bankruptcy. He

Customer Question

My husband has no other options than to file bankruptcy. He has been without an income for at least 1 year, has rental homes and bank stock which are now worthless. He is in tremendous debt for investments gone bad. I am a medical professional and I do not want to be a part of the bankruptcy. We have a few loans together. If he files married, will my income be factored in the equation with his payback potential? Will he be able to reaffirm our loans together or is this up to the trustee's discretion?   We had relationship issues 2 yrs ago and I purchased a separate residence at that time. Due to financial reasons and for the sake of our 14 yr. old son, we did not get divorced. How should he file for bankruptcy so that it will not affect me. I do not have assets other than retirement and educational funds. If he files for bankruptcy will the creditors call our notes together due .... forcing me to pay them off immediately? Thanks
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 7 years ago.

There is no such thing as filing for bankruptcy as "married." A person files by themselves, or jointly with their spouse -- marital status is irrelevant to the bankruptcy petition.


If your spouse files alone, then any jointly held property or debt can be reached by the bankruptcy trustee for the satisfaction of unsecured creditors.


Your income is not a factor in paying your husband's creditors.


Reaffirmation of jointly-held debts is possible.


Re creditors calling notes due, an unsecured note is wiped out. A secured debt permits the creditor to foreclose/repossess the secured property. Most creditors don't go after the secured property, unless the payments stop.


Finally, GA law provides an important presumption concerning marital property and debt: § 19-3-10, states: "A married person may make contracts with other persons; but, when a transaction between a husband and wife is attacked for fraud by the creditors of either, the onus shall be on the husband and wife to show that the transaction was fair. If a husband or a wife has a separate estate and purchases property from persons other than his or her spouse, the onus shall be upon a creditor levying on such property as the property of the other spouse to show fraud or to show that the husband or wife did not have the means with which to purchase the property."


What the above-quoted statute means, is that if the bankruptcy trustee or a creditor believes that you and your spouse have arranged your finances so that he has all the liabilities and you have all the assets, then they can try to convince the court that a fraud is being purpetrated and the bankruptcy will simply be dismissed, leaving you both to the wolves/creditors.


So, while I'm certainly not accusing you of any funny business, it's something that you need to discuss with a local bankruptcy lawyer, because you may decide that a joint bankruptcy is a better plan.


Hope this helps.


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Customer: replied 7 years ago.
This is new to me and I think I messed up and sent another question instead of a reply. I fully accept this answer. Please look for the next question from me also on the same related subject. Let me know if you cannot locate it.
Expert:  socrateaser replied 7 years ago.
I don't see any other questions. Feel free to just ask me here.