May have to legally seperate for DH to file Chap. 7

[Ljeen]

Hello,  My husband and I reside in NYC.  My husband needs desperately to file Chapter 7.  He cannot pay what he owes and he is being garnished plus several holds on his bank account.  We went to attorney last summer and because we are married they are saying that we make too much (which is a lie in NYC) for him to file Chapter 7.  They are using my income as well. He was told it would be Chapter 13 and he would have to pay back everything in 5 years.  This is not an option!  I have no debt problems yet I would be suffering.  Everything is in my name, the apt. lease, the car and all utiliites.  We own no assets at all and have no savings. 

I will move out if I have to and legally seperate or divorce if that is what it takes. He can stay in the apt. (landlord can't throw him out) and he can continue with the rent, gas, cable, food, medical etc. and he will more the qualify for Chapter 7.  

We realize this is a drastic measure but I need to save his life. There is no other way.  They want to count my salary.

Sorry for the long rant but does anyone know if we need to be legally seperated in order for the attorney to be satisifed that my husband does not have my income?

Thank you.

[Anonymous]

Did you ask the attorney this question?

NY is not a community property state (is equitable distribution), but it still can carry some spousal liabilities even if you separate depending on the nature of the debts.  Certain debts such as housing, utilities, medical, etc. can potentially be laid at your feet under the law or doctrine of necessaries, which essentially says that a spouse is responsible for the "necessaries" of the other.

You should speak to the attorney about "necessaries" and if separation will relieve you of his liabilities/debts.  Don't make this type of decision from a forum discussion....you need legal counsel from a NY attorney who practices in that area.

Good luck

[krielly]

Ljeen,

Whether or not you are married, your household income is what is counted in a Chapter 13.

I think it's time for your husband to get some free consults from some other attorneys. With an attorney who can create a good budget, Chapt 13 doesnt' have to be horrid.

It's impossible to say without knowing all of your specifics, but just because you are in a 5 year plan, does not mean everything must be paid at 100%.

As I said, I think it's time for a couple of free consults. I'll also PM you with a great link to a wonderful forum. I think you will find it extremely helpful in your situation.

Best of luck to you!!!

K

[Ljeen]

Thanks krielly, but if I no longer live with him and are legally seperated, (I would have my own apartment) how can it count as household? 

We have seen an attnorney and we are about 50,000 over the NY Family Median. That 50,000 is from my income. His is 47,000. He owes about 70,000. Of course we do not take that much home. We get killed in taxes. To narrow it down, between the both of us, we take home 5,000 a month. 2,000 is him, 3,000 is mine. With all our expenses, we would have about 1,400 left over. They would want that. This first lawyer we saw was going to by book and I was able to back it up with online investigation. My husband would have to file a 13 and pay back 100 percent. That would pay everyone off in 5 years and I would be kissing alot of money a month away on HIS debt. These are all credit cards and a loan he took before we got married. It just got worse and worse.

I don't see how any lawyer is going to let him file a Chapter 7 while hubby is living with me. I don't see how he could without it being his neck on the line and creating false information.

I will ask another lawyer but I know what he's going to say. So, If I have to I will move out and then in 6 months my husband can file. ( I hear there is a 6 month look back) After the rent is paid my husband will be left with 1,000. After everything else, food, transportation, electricity, he won't have enought to pay back anyone.

Thanks!

[LindaLu]

I think if you are separated maybe don't even have to be legally separated you could be ok...it goes according to the income coming into your household.  They scare you on things like that when you file bankruptcy but when the paperwork is done they don't even check it out that good (even though they should).

My husbandand I WERE separated but he wasnt working and had no income so we still qualified and we almost had move back in together during the bankruptcy because we had too much equity in the house and they allow you $5000 per person as they said if we did not we were have to pay out the equity..we didn't move back in together and they still didn't even say anything when we went to court..I dont know if where you live they will be that stickle about things but if you have to separate  maybe he can live with parents or something until you go to court...after you go to court they don't check anything out after that and you usually go to court 6 weeks after filing..I know it is frustrating  but you gotta do what you gotta do!

Also do you have anything with both your names on it...? credit cards etc..? because it would bring you down with him so you may have a problem there..just an fyi..

good luck and be strong...it is the only way through it.

[Anonymous]

I was able to file bankruptcy without being divorced or seperated from my soon to be ex-husband. I guess how my lawyer made it seem is as long as you are living at seperate residences then you should be able to file on just your/ his income. Just my income was included and I was able to file. I guess a good thing came out of it I was able to file and get a second chance at life. All that happen is he was a sent a letter that I was filing bk. They did not invlove him at all which was great cause we were not on talking terms. 

Hope this helps!

[Anonymous]

Legally separating for the sole purpose of qualifying for a chapter 7 and avoiding debt payment is...well...fraud.   So, you open yourself up to more problems by doing that.  

You really should consult with another attorney.   I'm a bankruptcy attorney (not in NY), but I have access to NY means test information.  Not knowing what county you live in, or how many persons are in your household, or how many cars you own, and what other (if any) secured debt he has, and what debts you have, it is difficult to ascertain whether or not you qualify.    However, it is difficult to see how you could have $1,400/month left on a Chapter 7 Means Test, with only $8,083/mth gross income.   Taxes & the IRS living/housing allowances should get you below $3000 (if you live in NY County, then you're down to $600 or so).   If you have cars, that should cut you down to about $2,000 (below $0 in NY County).   If you have health insurance, charitable contributions, childcare expenses, court-ordered payments, union dues, out-of-pocket healthcare expenses, or a few other things, you should be getting down way below $1,400 (way below zero in NY County).   

And, if you contribute to a 401k or other retirement program, you can't use that to qualify for a Chapter 7, but you can use it to reduce what you need to pay to unsecured creditors in a Chapter 13.  For example, suppose your disposable income is $1,400 under a Chapter 7.  If you contribute $600/month to a 401k, then the amount you'd need to pay to unsecured creditors in a Chapter 13 is reduced to $800/month. 

Have either of you missed work in the last 6 months, or seen a reduction in income?   The Means Test is based on your income for the 6 months prior to the month you file bankruptcy .   So, if you filed this month (May), it would only consider income from November through April.     Or, if either of you were to miss a few paychecks in May and June, and then filed in July, it would have a dramatic effect on your Means Test.   

Message Edited by mrthomas on 05-05-2009 03:56 PM

[Anonymous]

Txjohn is right. Definitely consult an attorney.  I don't believe you have to be separated or divorced to file Chapter 7 as an individual creditor.  You may want to check around for another attorney.