Legal Question in Bankruptcy in Alabama

''Marriage and Chapter 7''

I am considering filing for Chapter 7 and am married. All of the credit card debt is in my name, but our house payment is in both my husband and my name, with him as the primary account holder. He owns another piece of property, which is also under mortgage, but is only in his name (although I had to sign the mortgage papers-NOT as a co-signer though). I also have my washer and dryer financed through the power company. My question is can I file for Chapter 7 without affecting our home, the other piece of property, my washer and dryer, and his credit? How far behind do I have to be on these payments before filing? Will things that he has co-signed for with other people be affected? And what about my husband's truck? He had it before we were married, it's paid for, but is in his and his dad's name (the title says Greg or John).


Asked on 2/14/04, 5:33 pm

1 Answer from Attorneys
Sterling DeRamus Sterling L. DeRamus, Attorney at Law

Re: ''Marriage and Chapter 7''

There are a lot of factors to go into a decision as to whether to file Chapter 7 or 13. One of the biggest is the amount of equity in your primary residence. You state that your husband is the primary account holder on the mortgage, but if you both bought the house it is most likely in your name and you are jointly responsible for the debt. I would have to look at the papers to be absolutely sure. There also may be other issues related to your total household income that may impact under what chapter, but generally speaking you do not have to be behind your payments at all to file for bankruptcy. Nor should the bankruptcy effect his credit - but if you guys apply for another mortgage and are required to have dual income or something where your credit rating is at issue than it can create some problems. (and I emphasize, "should")

As to the washer and dryer, you should normally be able to keep those - as long as you can continue to make the payments. While it is not required, most companies in that situation allow for you to sign a reaffirmation agreement and keep making payments without losing the collateral.

If you have any further questions or would like to discuss in more detail, please do not hesitate to call me at 205-458-1100.

Sterling L. DeRamus

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Answered on 2/16/04, 12:15 pm


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