Wife filing Bankruptcy. Question on joint owned car

[chaser1111]

I found this forum a few months back and have found alot of usefull information. I have a few questions about my wife filing for chapter 7 solely and what it entails.

My Wife makes roughly 30k/yr and has debts that equal about 80-120k, mostly medical and student loans. After taking a look at both of our financies we couldn't even begin to pay that amount off within the next 20 years. Most of them are made up of medical bills. So we're thinking that the only option at this point for her to get a fresh start is to file chapter 7. Most of the debts havn't been paid on for a few years already. We just recently completed her second rehab program for student loans and now they are all current:

All of the debt is from before we got married. Last year she inherited an automobile free and clear when her father passed away. The car was registered in ND in a wife or husband as the owner situation. Meaning either one of us can sign the title away. I recently took a loan on the car for 6k, The value of the car is around 12k, according to the bank. The loan in solely in my name.

If she files, because there is 6k of equity left in the car and the car is in mine or her's name, is it still considered an asset the court could take? ND only allows 1500 in equity from my research for it to be exempt.

Now i understand they take my income into consideration, but do they also take into consideration my own debts as well?

[SoulMaster]

1. Student loans aren't dischargeable.

2. You married her, her debt is your debt (I don't care what state law says... marriage is a combining of assets/debts/incomes).  Sorry, I just hate when people say "My wife/husband has debt".  Nope.  You (plural) have debt.

3. If your income is more than $30K, she may not even Q for a 7... your income matters. If there's only the2 of you, your combined income can't be more than about $61K (in North Dakota) or you'll fail the means test.

The wild-card exemption in ND is $7500... the car will probably qualify under that.

The best plan is go to a free consult with 3-4 attorneys and ask them about the exemptions and whether or not you'd pass the means test.  

If you're over the means, and can only do a 13, I'd suggest:

Get a divorce (one of you has to move out), wait 6 mo, BK, reconcile the marriage. <---yeah, this is horrible, so is BK.

- OR -

Start selling assets, taking extra jobs, saving money, and settle the debts (together). <--- This is what you should do, especially if they're not threatening lawsuits.

-OR-

File jointly.

If jointly you're both under the means and she does Q for a solo 7, then yes, I'd BK7 her as fast as I can, regardless of the car.

Good luck,

-SM

[chaser1111]

1) Sorry i didn't put it in my first post, but I do realize they are not dischargeable.

2 Point taken, lol

3) when filling out the means test online we just fall under the mean income by using her last six months income, due to a month of no income due to a job change.

As for the options, Divorce is not an option for us, Even for a temporty time frame. Had i known about the full extent of the debt when we were engaged, i would have had her file then,   Filing Jointly isn't an option either, I filed chapter 7 , six years ago due to a failed buisness and have worked my butt off to get back to the decent credit I have now.

The main reason i'm concerned of the car, Is the sentimental value it holds for her, being a highly treasured item to her and her father. 

Reading more on the wild card option, This seems to be the  way that we can hopefully avoid loosing the car in the process. Thanks for the info.

[shols44]

Chaser welcome to the forums. You came here to get good options. Soulmaster just gave it to you straight. It doesn't seem like you will qualify from the general gist of your post. Even if she filed single.....the creditors could simply come after you for all her debt.

I would SERIOUSLY consider divorce in your case simply from the business end of things. You don't have to stop loving her or stop being married in your behavior. But I just don't see very few better options. 120k is no joke IMO and certainly points to a chap7.

Are you within the SOL for the entire 120k?

[SoulMaster]

Shols poses a great question... I looked up the SOL for ND when I was posting and it's 6 years so I left it off.  If the non-student loan debt hasn't been paid on in > 6 years then it's dead, AND it's a year from falling off the CRs.  On the other hand, it's now Zombie debt, and the collection agencies can pester you for the rest of your life.

I don't understand why a temporary divorce isn't an option... If it's for religious reasons then filing Bankrupcy isn't an option either (Failure to be a good steward of the gifts and responsibilities Jesus has given you, for example. Also, Psalm 37:21 reads, “The wicked borrow and do not repay, but the righteous give generously.” <---IMO, these are both ridiculous reasons not to file BK, I'm just pointing them out.)  But whatever, I don't understand marriage anyway so I'm not even going to get near understanding someone's reasons to not get divorced!  Lol!

Seriously, we can help you lots here, but on that car I'd go talk to an attorney more familiar with ND BK rules.

Regarding The Car:  Rule #1 of Financial Decision Making:  Leave emotion out of it.  <---This, not education level, upbringing, religion, work ethic, etc... is why the rich stay rich/get richer and the poor stay poor.

Shols is funny... I always give it straight!  Hahahah!  I figure people can take the advice I give, or leave it.  There is a law of the universe, though, that my friends will tell you: "If you DON'T take SM's advice, he is right 100% of the time.  If you DO take his advice, it's more like 80/20!"

Cheers!

-SM