Expert: Terry Leeders - 10/15/2007

Question
Mr. Leeder,

Firstly, thanks for having this resource on the net.  I live in Oklahoma, am married, and have about 24000.00 in CC debt, which has racked up to 34,000.00 over the past 4 years of non-payment.  I had great credit until I got married, pregnant, and started to have to pay nearly 600.00 monthly in child care.  My husband has worked part-time and been a full-time student through 5-2006.  He has decent credit and out of necessity has been able to secure us two car loans (each about 12000.00 right now) and a home loan (125,300.00 still owing).  My name is not on any of these secured debt.  

The only secured debt I have is a 9000.00 student loan debt that is deferred right now.  I now have a judgement of 10600.00 filed against me and a court order indicating that I must show up on October 24th for a discovery of assets meeting.

Initially, we looked into a loan to consolidate all our debt, but we only have 700.00 of equity in the home as we've been paying for the mortgage since 3/2007.  Also, in 3/3007 we had our 2nd child, and now are paying 940.00 monthly in childcare, this is the lowest we can find in our area.  

My problem is that all this debt was accumulated before our marriage, and only about 1 year into the marriage.  He never used any of the cards.  Of course, he has decent credit or would not have been able to secure the loans he did.  I've arranged making payments on a particular debt, that id'd themselves as CACH of Colorado, which is the one that filed judgement and this recent court order.  Apparently, the 1300.00 I've paid to CACH was not them at all.  I pulled the electronic checks that went through on my checking account and the stamp on the back was for CACV.  It can get very confusing when you're not sure who purchased the debt, etc.

We are financially strapped month to month, and still have been trying to arrange payment since my husband has graduated and we have a more money.  However, w/ this court order pending, I CANNOT be forced into a garnishment OR we will be with out about 740.00 in the hole every month.  

This year I will gross about $33653 and my husband will gross about $47,198, so I know that Chapter 7 seems no possible intially.  I pay about $630.00 in healthcare insurance each month, about $80.00 in out of pocket healthcare expenses, $940.00 a month in daycare, the mortgage payment is $1028.00, the car payments are $472.00 together, plus $199.00 for car insurance.  My husband has about 5,000.00 in cc debt that we are current on.  I have about 5,000.00 in cc debt that I am current on.  But I do have the 34,000.00 of old cc debt that I was not able to pay on for so long.  

I guess my real question here is - is there any way to help save my husband from filing with me?  I think we might barely eek by w/ a Chapter 7 if we file together.  I'd like to, however, file a Chapter 13 alone, and work out a 60 month payment plan.  Because the mortgage and cars loans are not in my name, I am worried that I will not be able to include those as obligatory debt that I must pay each month, and it that's the case, then I may wind up paying up to 500.00 a month on a payment plan because it looks like I have more disposable income than I really do!!!

I am just confused and need some advice as to what I should do.  Sorry for the long detail, but it makes me feel better to know that SOMEONE knows my circumstance.  I do not want to be considered a deadbeat and I want to pay back my debt somehow, someway.  My choices and circumstances in life were just not the best conditions to pay this back promptly and under the terms the cc's wanted.  

Thanks for your help!  Forever grateful,

Answer
You should sit down with an attorney to help decide the best plan of attack.  If you file individually, the court looks at his income/expenses too on a means test (budget) analysis to see how much of the debt can be paid back in a chapter 13 (if any)  A chapter 7 might be your better option to clear out all of the credit card and medical bills.  All that would be left would be your student loans.   Assuming there is no equity in the home, and you both spend all of your income, the Ch7 might be the best option.  Take advantage of  the free consultations most bankruptcy attorneys offer.  I do not know OK law, so you want to make sure the local rules won't affect you.