Legal Question in Bankruptcy in Utah
bankruptcy and divorce
My girlfried is divorced. We are moving in together and are expecting a child. We recently found out that her credit is shot because of things from the divorce she did not know about. We would like to get married but want to keep my credit in tact while trying to resolve her situation. Her name is still on their old house with his and it is being foreclosed on. She also found out from a credit report that she has about $18,000 in unpaid medical bills for her children that were sent to a collection agency. Apparently he let the insurance lapse and did not tell her along with not paying the bills. She is finishing nursing school and our best estimate is that she has about $20-25000 in debt / collections tied up in both of their names together. What would be the best way to address this? She was not even aware of all the debt / unpaid bills except for the house that is being foreclosed on. Would bankruptcy be a good, viable option for her to remove her name from her ex and the debt / collections in both of their names? She has school loans that she would like to fully pay back that is not related to the divorce. Would those have to be included in a ch 7 or 13? Where should we start to resolve her situation?
1 Answer from Attorneys
Re: bankruptcy and divorce
I have always advocated Chapter 7 bankruptcy to get a fresh start in life. It sounds like she may have to do that particularly because of the amount of debt and that fact that she'll be hit with a deficiency balance once that house is forclosed on and sold. Get a clean start and see a bankruptcy lawyer. As a former bankruptcy practitioner I should state that filing Chapter 7 now is very expensive and difficult to do since Bush changed the law back in October of 2005. Student loans are NOT dischargeable in bankruptcy so she will have to pay those back.
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