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A.J., Attorney
Category: Bankruptcy Law
Satisfied Customers: 4300
Experience:  Experienced consumer bankruptcy attorney.
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MY wife is going to end up having to file Chap7. We pass the

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MY wife is going to end up having to file Chap7. We pass the means test for income as she's working part time and I'm unemployed.

Two part question:

I own two homes, that's not in her name, that I bought before we got married. Does that get listed as one of the assets? They are underwater regardless so there won't be any selling of them. But they are in my name, my brothers name and his wifes name.

Second question:

We have not been using credit cards to buy any luxury items. Strictly things like food, gas, Walmart, Publix, the occasional eating out and that's about it. No Rolex's or Motorcycles, nothing like that. We just need the cash to keep paying our bills for the time being. Provided it's not flagrant, will they try to make us reaffirm the debt. It's only about 7500 in credit cards.

Reason we might have to file BK is due to potentially losing a civil case in the $100k range that we obviously can't pay.

The CC balances are $3k on one (that's three years old and always paid on time), $2k on another that's always paid on time and a year old. And another one that's 4 years old, $2k and always paid on time. Her credit is great. I just know if we lose this case, we will file Chapter 7.



SavyLawyer :

Hello and thank you for using Just Answer. My name isXXXXX am a bankruptcy law professional, and I look forward to answering your question this evening.

SavyLawyer :

(1) Florida is not a community property state, so no, when one spouse files for chapter 7 bankruptcy protection and the other does not, any property held solely by the non-filing spouse is not listed as an asset, it is not part of the bankruptcy estate.

SavyLawyer :

(2) Credit card debts in a chapter 7 are almost never required to be re-paid. Clearing such unsecured debt is one of the main reasons people file for chapter 7 bankruptcy in the first place. While the bankruptcy trustee can try to seize any non-exempt property to pay off unsecured credit card debt that is held by the bankruptcy debtor (your wife), credit card debt is not repaid by the debtor directly. Only secured debts, such as a home mortgage or a loan securing a car is ever reaffirmed.

Customer: We are selling a very expensive car, to downsize. Can she reaffirm that debt? (The new car loan).
SavyLawyer :

Now, it is important to be aware that, if a credit card debt is discharged in bankruptcy, the credit card company may close the account and not allow the debtor to use it anymore. The non-filing spouse's credit generally is not effected, however.

SavyLawyer :

Yes, a car loan can be re-affirmed, so long as the lender agrees (which generally requires being up to date on the debt) and the court approves it (or your attorney does, if you work with an attorney).

Customer: Are houses the only thing of mine protected from her bankruptcy? Can they seize any of my assets to repay her debts?
SavyLawyer :

There also cannot be to much equity in the vehicle, or the trustee could try to seize it to sell and pay some of the debts.

Customer: It would be a lease.
SavyLawyer :

No, in a separate property state, where sole assets truly are sole assets, only assets that the debtor (your wife) has legal title to or an interest in would be subject to the bankruptcy estate. Anything solely in the non-filing spouse's (you) name is XXXXX XXXXX from bankruptcy.

Customer: No kidding? So if I have a securities account with some stock. They can't touch it? (Generally)
Customer: It's not a lot. But a few thousand. Was going to liquidate it before the BK and pay back some debts.
SavyLawyer :

That is correct, generally any assets that are solely held by the non-filing spouse are safe in bankruptcy (this means that the filing spouse has absolutely no legal interest in it). The only exception to this rule would be if the asset was transferred from your wife to you recently in attempt to avoid loss in bankruptcy. That could be considered fraud, and allow the trustee to invalidate the transfer.

SavyLawyer :

Otherwise, yes, assets that the debtor does not have any legal interest in are not subject to the bankruptcy estate in a chapter 7 bankruptcy.

Customer: Sweet. Awesome. You answered my questions. Thanks as usual.
SavyLawyer :

You are very welcome, I am glad that I could provide useful information. If you do not have any further questions, please remember to RATE my answer so that I can receive credit for my work, and I wish both you and your wife the best of luck in the future.

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