Filing Considerations

I am married, does my spouse also have to file bankruptcy?

No. In some cases where only one spouse has debts, or where the other spouse has debts that are not dischargeable, then it might be advisable to have only one spouse file. However, in some cases where real property is involved, or where the spouse is a co-debtor on most of the other spouse's dischargeable debts, then the question of joint bankruptcy is a little trickier, and questions should be referred to an attorney.

I am a co-signer for a debt, how does bankruptcy affect my obligation?

If the debt is a dischargeable debt, then you will not have to pay it. However, the other co-signer becomes primarily responsible for the debt.

Is there anything that I should not do if I am contemplating filing for bankruptcy?

There are several areas related to this question. You should consult your attorney. In particular, there are three items worth mentioning. First, under bankruptcy law, certain purchases of luxurious items over $500 within 90 days of filing for bankruptcy are presumed to be nondischargeable. Also, under bankruptcy law, cash advances aggregating $1,000 within 60 days of the bankruptcy filing are presumed to be nondischargeable. Last, debts involving materially false financial statements are nondischargeable under certain circumstances. "Running up" credit card debt just before filing is fraud and will likely be prosecuted as such.

Who can help me with my bankruptcy?

The best person to help is your attorney. When you discuss your situation with your attorney, you will need to be prepared to discuss all areas of your case. This includes each and every debt and creditor you have. It is very important to list all your creditors in your bankruptcy. One of the best ways to know all your creditors is to get a credit report about your credit history. This report should list the majority of your creditors, even ones you did not know about.

Are there any alternatives to bankruptcy?

Aside from debtor protection under the bankruptcy laws there are some other alternatives. These include credit counseling, loan extensions, compromises, mortgage modifications, short sales, workout agreements and taking no action. All but the last require negotiation skills and experience. These alternatives may alert your creditors to the existence of nonexempt property that the creditor could reach. In any event you should seek professional advice in dealing with most of these alternatives.

What about credit card counselors?

Be careful with credit card counselors. I would not recommend any company that holds your money to negotiate a lump sum payoff of your credit cards. Usually, it takes too long a time to accumulate enough money to payoff a balance. In the mean time, the creditor can sue and obtain a judgment. These companies offer no protection against lawsuits. Also, not all creditors participate with credit card counselor programs. Creditors, however, are forced to participate in the bankruptcy proceedings so long as they are properly notified. Credit counseling with good reputations could be a benefit. Consult your attorney who can recommend a good credit counselor.