Expert: Terry Leeders - 5/1/2009

Question
QUESTION: My question for you is that if I were to file bankruptcy and my wife is a joint account holder on the account, will that affect her credit as well? Also what if I am an authorized user on one of her accounts will I be able to discharge that account with my bankruptcy or will that have to be a separate filing for her? Please get back to me at your convenience.

Thanks
Frank

ANSWER: Hi Frank,
This is a common question I get.
Authorized users - not your debt. Only the original signor/account holder is responsible for the debt.
Cosigner/joint applicant - both parties are equally responsible for the debt.  If the account is in good standing, it will just discharge for the bankruptcy filer, and not otherwise effect the cosigner, as long as the cosigner continues to make the payments according to the contract.  Now, the bankrupt party can choose to reaffirm the debt, to help protect the cosigner as well, most frequently done when the parties are married and only 1 files the bankruptcy case.

---------- FOLLOW-UP ----------

QUESTION: Thanks for the quick response Terry. I also have a follow up question. My question is do they take my wife's income into consideration should I need to file for bankruptcy. Also will I be denied if my payments to the creditors have always been on time and are now in jeopardy of being late. And lastly is it now more difficult to file for bankruptcy in these hard economic times?

Thanks
Frank

ANSWER: The court factors in all household income when calculating your means test to see if you qualify for chapter 7.  Payments will have no relevance in BK, actually it is preferred that you stop paying them before filing, so that wouldn't be a problem. The law change in 2005 made it more complicated to file, but the filing #s are increasing each year since then.

---------- FOLLOW-UP ----------

QUESTION: Thanks for your quick response again. Say that I stop making my payments(credit will go down the drain), how likely is it that I don't even qualify for bankruptcy. Also is it important to get an attorney to do this or is it difficult to do this on your own? And the last question I have is that how do you know what the right amount of fees an attorney charges to file are not high? The higher the fee the better the attorney and service?

Thanks again
Frank


Answer
I always recommend using an attorney.
Meet with several, check their credentials and choose the one you feel most comfortable with.  Prices usually vary based on the complexity of the case, not how experienced the lawyer is, although that may influence it slightly.  Use your best judgment and research when choosing the lawyer.