Bankruptcy in Arkansas?

Question

I live in Arkansas and have recently lost my job and my husband and I are getting divorced. We have 1 child. We have a very large credit card debt load (30,000.00) that is all in my name. Our home is in both our names and we have a 29,000.00 home equity loan that we got back in Sept 06 so we do not have any equity left in our house. We are trying to sell the house right now but I am not sure if it will sell to pay off the mortgage and home equity loan. I am considering bankruptcy and talked with an attorney through a free consultation and I would qualify for Chapter 7 where it would wipe all my debt away. I know this is the worst thing I can do for my credit but it may be my only option. I do not want it to affect my husband's (soon to be ex) credit so that he will be able to get things in case our son needs something. Would it affect him with his name being on the house or could I even file bankruptcy on the house too? Any information would be greatly apprecitated.

Answer 1

The bankruptcy laws have changed! You need to ask this question of your attorney. It is VERY likely that it would indeed affect your husband's credit if you filed before the divorce, and especially if the debts were not specifically awarded in the divorce between the two of you. Please, ask this of your attorney.

Answer 2

You don't get to pick and choose who you pay and don't pay. Bankruptcy is a legal issue in which an attorney and court ultimately handles your finances. Your husband (he's not your ex yet) may end being thrown into bankruptcy against his will. Just because his name isn't on the debts does not dismiss his liability if they were obtained during your marriage. You need to both sit down with a bankruptcy attorney to hash out your assets and liabilities. You will probably get child support and your loss of employment is hopefully only temporary. Bankruptcy is a 10 year credit strike that could end up affecting you both. Think before you act.