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Bankruptcy

My parents are getting a divorce and my dad moved out. My dad is planning on filing for bankruptcy. They own a home together and have some credit card debt. What would happen to my mom if he files? Will she get stuck with all the debt? Will the bankruptcy include her too?

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JLS2388

Asked by JLS2388 at 10:59 AM on Apr. 9, 2011 in Money & Work

Level 25 (25,280 Credits)
Answers (3)
  • They need to both file~~if your mom's name is on these bills and she doesn't file also she will be responsible for the bills.
    Carolannie

    Answer by Carolannie at 11:01 AM on Apr. 9, 2011

  • Whatever her name is on as well as your dad's HAS to be agreed upon, and dont be surprised when their creditors go to court and fight the filing and they both get stuck with debt they cant discharge. It happens ALLOT now that the economy is crappy. Creditors are fighting and winning in bankruptcy court more often than not.
    vbruno

    Answer by vbruno at 11:02 AM on Apr. 9, 2011

  • Depends on the type of bankruptcy he files and if he chooses to include joint debts (like the mortgage) or not. Basically the creditors shouldn't be allowed to collect on the debt like if it's a signature loan until after bankruptcy and then they can only collect from your mom if she doesn't file.

    But if it's a secured asset like a house or a car, bankruptcy might force the sale of that asset in order to pay off the debt. So if they had a car together- owed $20,000 but the car is only worth $15,000- your mom could get stuck with the $5000 difference. But again, it does depend on which type of bankruptcy he files and which debts he includes in it. And really, there's no guarantee that he'll even be able to file bankruptcy since there is a means test.
    Erica_Smerica

    Answer by Erica_Smerica at 3:18 PM on Apr. 10, 2011

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