What is the Second Costly Emotion That Keeps You In Debt and from Filing Bankruptcy?

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Stubbornness

It’s hard to knock stubbornness, even when it keeps people doing foolish things. After all, stubbornness, the drive to finish what you started, is often a virtue.

I’m talking about the attitude that says “these are my debts, and by d***n, I’ll get them paid”. Honorable, but not rational. See how long it takes to pay off a modest credit card balance by paying the monthly minimum.

Life is about choices, and the choice to keep chipping away at a Mt.Rushmore of debt means usually that some other, real and important need goes unmet. The greatest of these neglected choices, in my world, is retirement savings.

Cultivate stubbornness as a virtue, and the questionable choices of the past poison your future as far as the eye can see.

 

Michael A. Cibik, Esquire

Michael A. Cibik is a partner at the Philadelphia law firm of Cibik & Cataldo, P.C. He is one of the few bankruptcy attorneys in the Philadelphia area certified by the American Bankruptcy Board.

If you or someone you know is having financial problems, stop worrying and call Michael at (215) 735-1060 for a free consultation.

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Does Your Spouse Have to File for Bankruptcy with You?

In cases where both a husband and wife have a lot of debt, either individually or jointly, it may make sense and save money for both spouses to file a joint bankruptcy case….but it is never a requirement.

Should You File a Joint Bankruptcy?

Most of the cases we file where our client is married, only one spouse files. Sometimes, it makes more sense in a Chapter 13 case for one spouse only to file, so that if problems arise in the ability to make the Chapter 13 Plan payments, the other spouse can file to get a “second chance”. Often, where the majority of the household debt is only in one spouse’s name, we will file for the spouse with most of the debt to keep the other spouse’s credit in better shape.
And if you don’t have any joint debt, your filing will have no impact on your spouse’s credit. This is because, unless you live in a community property state, what you do individually with your credit will have zero, none, nada effect on your spouse’s credit. Even if there is joint debt, and your non-filing spouse keeps the payments current, it will not affect their credit.

What if There is Joint Debt?

Even if there is joint debt, in a Chapter 13, Section 1301 of the Bankruptcy Code imposes the automatic stay on co-debtors for consumer debt. This means that, during the Chapter 13 case, creditors cannot call, write, sue, garnish, attach, repossess or foreclose on your spouse. (Note that this does not discharge your spouse from joint debt; it only prohibits collections during your case. Once your case is over, the creditor can resume collection activity against your spouse.)
So when someone tells you that you cannot file for bankruptcy unless your spouse also files, you can confidently tell them that they’re wrong.
Next Week’s Topic: If you don’t have information about an asset, can you just put down “unknown”?

Michael A. Cibik, Esquire

Michael A. Cibik is a partner at the Philadelphia law firm of Cibik & Cataldo, P.C. He is one of the few attorneys in the Philadelphia area certified by the American Bankruptcy Board.
If you or someone you know is having financial problems, stop worrying and call Michael at (215) 735-1060 for a free consultation.