Legal Question in Bankruptcy in Kentucky

A friend of mine's spouse was tricked by their uncle to start a business with him. He would run the business, but the spouse had to (and did) give him the ability to buy/sell using the spouses name. The uncle accrued over $500,000 in debt in the spouses name through the business. The lawyer of my friend and their spouse told them that they make too much money to file for chapter 7 bankruptcy (spouse makes 33,000 per year and friend makes 25,000) and they would have to file for chapter 10. They have 2 automobiles (both in very poor condition), make payments on their house as they do not own it yet, and have no idea what they can do. If they file chapter 10 bankruptcy, 1/4th of the total debt must be paid within five years ($125,000). They fear they will have to pay over $1000 per month and they simply cannot afford it. I am currently unemployed and living with my parents. If I moved in with them, could they declare chapter 7? If so, how long must I live there while remaining unemployed? Would my moving in with them be considered fraud?


Asked on 6/22/11, 7:16 pm

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