Foo - Bankruptcy question

My lovely wife apparently racked up over $10,000 in credit card debt unbeknownst to me.
Before I chat with a bankruptcy lawyer I was curious how this will affect me. Meaning will her creditors find a way to come at me for my wife's debts?

Details:
1) We are cosigned on the house and two car loans. I am the primary borrower.
2) She thinks claiming the bankruptcy where she will have to repay is her only option. The lawyer she consulted with stated that my income is too high to claim total bankruptcy. He has also stated that I will be fine according to her. My trust in this statement is nonexistent.
3) I am not cosigned on any of her credit card debt.

Thoughts? Supposedly she is so far behind that my wife does not think I can dig her out of the tremendous hole she has dug herself into. How will this come back to bite me or will it?

community property? It's both of you. If you are planning on staying married, it's still both of you....

Supposedly she is so far behind that my wife does not think I can dig her out of the tremendous hole she has dug herself into. How will this come back to bite me or will it?

Behind on the $10k + compounded interest, or just the card balance(s) of $10k total (plus more compounding yet to come of course)?

Suck it up, reduce your lifestyle and pay it off. Cut up the cards. $10k is not that much money. You could pay it off in a year. Live and learn.

Important data here is when did she rack up these credit-card debts; before or after getting married to you? Also you should also look up the changes in bankruptcy law that Bush passed. Bankruptcy no longer absolves you of those debts, just buys you time in setting up a payment schedule with your debtors.

10K is not that much unless you are way strung out on house and car debt. Hell, plenty of people have many times that in student debt before they get their first jobs.

If you have any equity in your house, you could at least pay off the CC debt and refinance it at a much lower rate.

As has already been stated, your wife's debt is your debt if you plan to stay together.

If you have any equity in your house, you could at least pay off the CC debt and refinance it at a much lower rate.

Or a 401k to borrow from.

Or a 401k to borrow from.

Be wary of this though....great option if you know you will not be laid off. If you get laid off you have to pay it back ASAP or it will count as income and screw you on taxes.

Suck it up, reduce your lifestyle and pay it off. Cut up the cards. $10k is not that much money. You could pay it off in a year. Live and learn.

yep, suck it up, and pay it off

I would advise not to use home equity to pay off credit card debts. One year later, you could be in the same situation with your home in jeopardy. Sell a car, take the money and the car payment and put it towards paying the cc. Sell other things to raise cash. Bag lunch. Cut the tv cable and the cell phones out. Reduce costs everywhere and in a short time the crisis will pass and you will have learned to live within your means. When I say you, I mean you as in the marriage and household.

Colorado is not a community property state. She is responsible for her credit cards. You are both responsible for the house and the two car loans.

Are you looking at divorce in this case?

East Hill

I can't believe you are even considering bankruptcy. Although I don't know your situation, $10,000 does not seem like a lot of money, certainly not enough to declare bankruptcy. Sometimes you just need to buck up and do the right thing rather than look for the easiest path.

We all pay for others bankruptcy.

I'm not considering anything. My wife is. It is my desire to extricate her from the disaster she has made. Try being married to someone who is bi polar...
Anyhow, divorce may be in the future but first things first. As usual it is up to me to fix things but I believe a visit to the marriage counselor is in order.
Just researching things first. No harm in asking the question right?

...and yes Colorado is not a community property state.

Try to avoid the bankruptcy if at all possible. It might do her well to learn a lesson from having to HTFU and work her way out of it. If you can possibly use another means to pay off the CC with a lower interest source, that would be something to consider, but I'm sure you could also work out a deal with the CC company for a payment plan that might save you the normal crazy interest. Either way, the card gets cut, of course. Good luck buddy, I know your pain.

Quick question: Who pays the bills? I mean, who writes the checks every month? Do you pay yours, and she pays hers?

Call me paranoid, but if she managed to hide $10k of credit card debt (any idea where that went?) that would make me leery of her knowing what my account numbers were. If she has some kind of compulsion that you aren't aware of, she might be tempted to use yours w/o asking.

-Contact the cc issuers and explain that you think that your cards may have been compromised at your end. You want to close those and open new ones. Have the statements sent to your private email.
-Find out how she incurred that debt. You have a right to know, seeing as how you're on the hook to repay, in part or whole, her debt.
-Check out the Dave Ramsey show. You'd be surprised at the number of people calling in with similar stories. The repeats are on Hulu.com

EEEK! Hold on.

Okay, I've been there. Twice. There is such a thing called "credit counseling". It will take a few years to pay off this debt, but you can do it. Find a non-profit credit counselor like CCCS (http://www.cccservices.com/) and go through them. The way it works is this: You agree to freeze all your credit and not take any more on. It sounds tough, but it's not as bad as you might think. The counseling service sets up agreements with your creditors (credit cards/unsecured loans only, not mortgages, car loans or student loans) which usually involve a lowering of interest rates and monthly payments. You pay the counseling service once a month, and they pay the credit cards for you. There is usually an administrative cost associated with this, but it is far, far less than the money they will save you in interest.

While you're in the repayment plan, your credit rating is similar to someone who has a bankruptcy on their credit report, but as soon as the payments are complete it will probably bump up to higher than it is right now. You can expect it to take 3-5 years to pay off. Credit companies prefer to do it this way because they get most of their money and they know someone is keeping an eye on you to make sure you pay things back.

I got laid off during credit counseling and they were able to lower our payments even more until I found work. A good credit counseling service can be your advocate with the credit companies.

Thanks chip

Just to be clear I have no intention of declaring bankruptcy. She wants to declare it on her own and whatever type that requires a payment plan.
I am trying to convince her this is a bad idea. Personally, I would rather give her X amount of cash to get caught up and force her to pay it back. Somehow I will need to monitor it.

You know what is worse than this BS having happened... being repeatedly lied to. Just gives me the warm and fuzzies. Anyways....

Thanks chip

Just to be clear I have no intention of declaring bankruptcy. She wants to declare it on her own and whatever type that requires a payment plan.
I am trying to convince her this is a bad idea. Personally, I would rather give her X amount of cash to get caught up and force her to pay it back. Somehow I will need to monitor it.

You know what is worse than this BS having happened... being repeatedly lied to. Just gives me the warm and fuzzies. Anyways....

What did the spend 10 grand on? Can you return/sell any of the stuff? Maybe buy a new bike with the proceeds (I'm keeeding! ;))

Quick question: Who pays the bills? I mean, who writes the checks every month? Do you pay yours, and she pays hers?

Call me paranoid, but if she managed to hide $10k of credit card debt (any idea where that went?) that would make me leery of her knowing what my account numbers were. If she has some kind of compulsion that you aren't aware of, she might be tempted to use yours w/o asking.

-Contact the cc issuers and explain that you think that your cards may have been compromised at your end. You want to close those and open new ones. Have the statements sent to your private email.
-Find out how she incurred that debt. You have a right to know, seeing as how you're on the hook to repay, in part or whole, her debt.
-Check out the Dave Ramsey show. You'd be surprised at the number of people calling in with similar stories. The repeats are on Hulu.com

I pay the bills and we have our own separate spending accounts.
I knew things were up but this was surprising. Like I said Colorado is not a community property state. Helping her out is more of a husband wife thing than legal.
6 months ago I cut her access to the household account due to her spending. Bi polar folks + CC or DC is a bad idea. I give her cash once a week.
Anyhow, time to drag her to marriage counseling and in the meantime figure out how to fix this. Perhaps a credit counselor. Perhaps no. We will see.
Incidentally, my wife's credit rating is the polar opposite of mine. Egads.

What did the spend 10 grand on? Can you return/sell any of the stuff? Maybe buy a new bike with the proceeds (I'm keeeding! ;))

I have no f'ing clue! She doesn't have crap.
I am at a loss. How does one spend $10,000 and not have anything to show for it?
I would at least have a boatload of bikes.

I have no f'ing clue! She doesn't have crap.
I am at a loss. How does one spend $10,000 and not have anything to show for it?

Could it be gambling?


I would at least have a boatload of bikes.

EDIT: Haha, I thought you said "bites."

I have no f'ing clue! She doesn't have crap.
I am at a loss. How does one spend $10,000 and not have anything to show for it?
I would at least have a boatload of bikes.Easy...spend $800/month on clothes for a year. That's not a lot of items if you buy designer-label stuff.

Be very wary about bankruptcy...with the rule changes of recent years, you can wind up still owing most of the money...plus the lawyer's fees...

What prevents her from doing it again?

Take it from someone who's wife cheated for 5 years without
me having a clue... a spouse can be quite deceptive. Protect yourself at
any/all expense.

My lovely ex-wife apparently racked up over $10,000 in credit card debt unbeknownst to me.

fixed that for ya

seriously - that's f'd up. move on

The gambling suggestion is an excellent thought. One of those online casinos or poker websites, if Colorado does not have actual casinos. If so, you may get this debt paid off, but will she incur additional gambling debts in the future? Or could she have been doing day trading of stocks?

Dj, I apologize for my rude response. I am not used to a married couple life living like that and I know absolutely nothing about bipolar disorders. I am sure what you are going through is hard and I wish you the best.

No day trading for my wife. We do have casinos but when I am at work she has the kid. I suppose online gambling would be possible.
I'm not going to toss away 12 years of marriage. But I am not going to be a chump either.
My thought is to try and help her out with taking on as little debt as possible. Thus, leaving the responsibility to her ...as it should be. The real kicker is how am I ever going to know that this will not ever happen again. Something to ponder on my next long bike ride.

As long as you are married, your her credit rating will affect yours, community property state or not.

Dj, I apologize for my rude response. I am not used to a married couple life living like that and I know absolutely nothing about bipolar disorders. I am sure what you are going through is hard and I wish you the best.

No worries. Strangely enough I did not find it rude. Just tapping the great foo fountain of knowledge as a starting point.
In my family bankruptcy is a form of extreme last resort. Meaning that everyone is unemployed and what not. My wife's family is the opposite in that it is the first option. Quite pathetic if you do ask me.

Did I also mention that I do all the laundry, cooking, and cleaning while working busy job + riding 7000-9000 miles a year? Pity me please! lol
No wonder my health has been crapping out lately.
Ah well.... maybe I need to visit a counselor first and then the marriage counselor. Maybe a bi polar support group for families as well. Jeebus...

As long as you are married, your her credit rating will affect yours, community property state or not.

lalalalalalalala

Don't want to think about that one.
*huddles in a corner rocking back and forth in a fetal position while crying*

Could it be gambling?That'd be my guess. It'd explain the large sum, and it being kept hidden...

If that's the case, DJ, she probably needs to seek help, as it's not going to be something that just goes away easily.

Best of luck.

Hmmm, given that she's bi-polar. Food might also be an option. It might sound weird (how the hell do you spend 10.000 on food), but it is possible.

Besides, 10.000 isn't that much. If you have a decent job and live frugally (well, that might be hard with a bi-polar person) you can knock it in a year without too many problems.

whoa - sorry I missed the bi-polar thing. not easy to deal with (my brother has been diagnosed as such).

you also need to look out for yourself too (now and future)

good luck

I'm not considering anything. My wife is. It is my desire to extricate her from the disaster she has made. Try being married to someone who is bi polar...
I've lived with a bipolar person. My sincere sympathies -- that is no joke.

The bad news is that if she really has issues, there's nothing you can do to control the situation. Due to our idiotic credit system, she can always get more without your knowledge. This means you have to work together and she has to buy into the solution.

The only real solution is to sell stuff until your debt load is manageable and live within your means. My long distance read on your situation is that she's trying to avoid the inevitable and sees bankruptcy as the easy way out when that will cause far more pain in the long term.

I believe that your wife's situation is yours regardless of what the law says. However, if she's hell bent on taking this ill advised path, make it clear that for for everyone's sake (yours, hers, and your kids) you have to take measures to protect what assets are left.

Thanks chip

Just to be clear I have no intention of declaring bankruptcy. She wants to declare it on her own and whatever type that requires a payment plan.
I am trying to convince her this is a bad idea. Personally, I would rather give her X amount of cash to get caught up and force her to pay it back. Somehow I will need to monitor it.

You know what is worse than this BS having happened... being repeatedly lied to. Just gives me the warm and fuzzies. Anyways....

wait a minute..... You didn't marry my first wife, did you?????:eek:

fixed that for ya

seriously - that's f'd up. move on


http://www.1bbgun.com/hunting.jpg

&

http://suttonplace.mlblogs.com/photos/uncategorized/shovel.jpg

wait a minute..... You didn't marry my first wife, did you?????:eek:




lol

Want her back? :p
The way things are going the likelihood of my wife being available in the near future is fairly high.

What exactly did she spend it on?

Any chance of selling any of it? Honestly, start selling her stuff. $10k is a lot, but not that much, not worth ruining a happy marriage over, at least in my opinion.

lol

Want her back? :p
The way things are going the likelihood of my wife being available in the near future is fairly high.

http://hotimg25.fotki.com/a/72_12/44_70/hellno-vi.jpg

I felt fortunate to get out of that with my sanity. Although whether I actually did or not is open to question.

Have a bike question: ask here (well, maybe not Foo, but a 'bike forum')..if you have a financial question, there's a great group of 'tell-it-like-it-is/tough love' regulars over at The Motley Fool's Forums 'Credit Cards and Consumer Debt' board that I really admire. You might post your question there. The boards are free. Good luck.

DJ, if this is the only debt, you can also try negotiating directly with the credit card company to reduce the interest rate, close the account, and get a repayment plan set. It keeps everyone out of bankruptcy, and companies will often agree to something like this rather than go through the cluster**** that is the bankruptcy claim process. Even though you can't discharge the debt easily, they still have to spend money on lawyers and wait to get their cash. In these economic times, they'd rather have your wife on the hook with a payment plan.

Have a bike question: ask here (well, maybe not Foo, but a 'bike forum')..if you have a financial question, there's a great group of 'tell-it-like-it-is/tough love' regulars over at The Motley Fool's Forums 'Credit Cards and Consumer Debt' board that I really admire. You might post your question there. The boards are free. Good luck.

Without endorsing or condemning the site (only because I have never looked at it), I will supply the address in case people are interested
Personal Finance (http://boards.fool.com/Boards.asp?fid=10104&bid=100145)
Credit Card and Consumer Debt (http://boards.fool.com/Messages.asp?bid=100145)

What exactly did she spend it on?

Any chance of selling any of it? Honestly, start selling her stuff. $10k is a lot, but not that much, not worth ruining a happy marriage over, at least in my opinion.

No clue. Still trying to figure that one out.
I'm not sure I would characterize my marriage as happy. It's more like having a slob of a roommate than anything.

Damn, sorry to hear this. And I was worried about the bf because he seems to be completely unable to save. :(

Abandon ship, or at minimum put a fraud alert on her credit report (must be renewed every 90 days) to make it harder for her to get cards in the future. Even if you aren't a fraud victim you can request it, and it adds several steps to the CC application process from what I understand.

Thanks everyone. I now have a starting point and that is what I was looking for.

DJ, if this is the only debt, you can also try negotiating directly with the credit card company to reduce the interest rate, close the account, and get a repayment plan set. It keeps everyone out of bankruptcy, and companies will often agree to something like this rather than go through the cluster**** that is the bankruptcy claim process. Even though you can't discharge the debt easily, they still have to spend money on lawyers and wait to get their cash. In these economic times, they'd rather have your wife on the hook with a payment plan.

In my experience, they do NOT do this, unless you go through a credit counseling service like CCCS (that I shilled for earlier). And honestly, having used a credit counselor, it is wonderful having that third party between you and the credit card company. Part of the agreement, you see, is that along with the sometimes lowered interest rates I mentioned earlier, the credit card companies also agree not to bug you; if they call you, you just refer them to the credit counseling company.

If you're (you and your wife are in this together, even if she's the one that's outta control) trying to this on your own, it can be tough especially if self-control is an issue. But when that third party is there in the form of a credit counseling outfit, things stay on track.

The credit companies may not work with you, but they will work with a credit counselor, which makes it easier on you anyway because they know all the ins and outs and have pre-established policies with many of the creditors. Credit counselors are non-profit but they are supported financially be credit card companies because it's better for them if they don't send you to collections.

I think you need both credit and marriage counselling. Credit to get her (and you) out of the financial hole, and marriage to work out where you both go from here. And you need medical help too. If she's spending in her manic phases, maybe a doc can figure out what triggers it, and whether there's a med that will smooth things down. You need to make sure she has no access to credit or debit cards, but you need to work all that through with her.

Good luck.