Expert: Terry Leeders - 1/25/2008

Question
I have almost 2 years with my husband. He decided to file a Chapter 7 because he created a construction company (before we got married) but it did not work so he lost a lot of money, now he owns around 70K credit cards (under his name and under his company’s name). He had more than 8 months without a job; he found one just at the end of December, based on that I am just surviving with my credit paying sometimes late. I have been paying the house and bills with my salary. There’s nothing during the entire 2007 year that he got as salary.

The only things that we have together is a Car Lease and I appeared as a Authorized User in one of his credit cards (I called them and Asked them to eliminate my name from that credit card because it doesn’t belong to me, they did it. Actually I noticed because they did a report in my credit as a delinquency 90 days, then after my call to the company it was deleted form my credit report), and he appears in one of my credit card as Authorized User but that card was cancelled by the grantor because of my most recent credit report showed some delinquencies (as I told you 2 months late or three sometimes). I am much better now, still with difficulties to pay all my bills and credit cards but at least the minimum until I guess he starts to get his salary monthly.  

I have three questions:

1)   I am worry about being affected by the car we are leasing together. He is the cosigner. Our lease ends in July 2008. His lawyer said that reporting that car is not going to affect my credit… (I don’t know after read some similar questions in this page. Can he not include that car into his bankruptcy? If he includes that car, do we have to return that car to the dealer?

2)   Because I already asked to be deleted from his Credit Card as an Authorize User, am I still at risk to be affected by?

3)   I declared my 2006 taxes alone, without him. Just one year because the year before that we were not married. This 2007 taxes, I don’t know what to do. If we do it together or by myself. I have to kids and I am desperate with all this situation and I don’t want to lose anymore money. He said that his lawyer told him that it would be better wait to file his case right after we got money back from IRS because the judge could ask for that money. She said also that she recommends doing it together. He has done his past 3 years taxes under his company name.  What do you recommend me? I am worry about my credit and also about my money. I really need every penny I got. This is hurting my finance too.
Thanks
Houston TX


Answer
1. A cosigned debt is equal responsibility.  So, whatever your husband doesn't pay, you will be on the hook for.  if he keeps payments current, you will not be affected.  If he surrenders the car, you are still responsible for any balance left after auction.
2. Authorized users are not responsible for the debt, only cosigners would be.
3. Household income and tax refunds are issues in the case, so it would be best to speak with your local bankruptcy attorney to see what can be protected, as each state has different rules.