Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also writes regularly for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Steward Radio and other programs. See her website SallyHerigstad.com for more personal finance tips and free budgeting worksheets. Ask Sally a question, or read her previous answers in the To Her Credit archive
Dear To Her Credit,
My husband and I have been separated for six months. Prior to separating from my husband, I was having problems with credit card debt. I tried going to a debt relief company; after the separation, I ended up being sued by the creditor. My husband gives me child support and spousal support, but not enough to pay for my debt. He also has his hands full with the mortgage and everything. Now I am filing for bankruptcy.
My question is this: Can they go after my husband for the debt? His name is not on any of the statements and he was not named on the lawsuit. If they can go after him, what are the chances that they will? We live in California. -- Maria
Despite the fact that your husband's name is not on the statements, if you ran up the credit card debt when you were married in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), in all likelihood he is legally liable for the debts, too. San Francisco collections attorney Joshua Friedman says, "Generally speaking, debts incurred during the course of marriage are considered community property and, therefore, both husband and wife are jointly and severally liable for the debts."
Whether the creditor actually will try to collect from him, however, is another matter. Friedman says, "More often than not, if the debt stands only in the wife's name, and the wife personally files bankruptcy and the debt is discharged, most collections agencies and/or collections attorneys will not pursue the debt against the husband for fear of violating the bankruptcy automatic stay and powers of the bankruptcy court. The risks are higher for the collections agencies, and the work to pursue is greater. So, from a practical standpoint, generally, these debts are written off and the banks do not pursue the husband (but if the debt is large enough ...)."
As you go into bankruptcy, you don't know if the creditors will pursue him afterward or not. If the debts are large enough to make you consider bankruptcy, perhaps they are large enough to be worth pursuit by a collector. That's hardly going to help you sleep at night.
The bigger problem, however, is that bankruptcy doesn't solve your root problem of too many bills and too little income. Even if your debts are wiped out tomorrow, you'll soon be back in trouble, if nothing changes.
I'm afraid that in your search for help with your financial problems, you've been looking in all the wrong places. Your time and money would be better spent learning to improve your financial position rather than listening to "debt relief" company and bankruptcy lawyer pitches. Debt relief didn't turn out to be any relief at all, and bankruptcy will disappoint you, too.
As you start your new, independent life, what you need is a plan -- not an escape hatch.
Your first step to financial success is to start making a living. Although your husband is supporting you now, that won't last forever. Think about your goals for the rest of your life. What can you see yourself doing for a career? What steps can you take to make your dreams a reality?
If you've been out of the workforce, you'll need to first find a job or business so you can start gaining experience. Then, as you discover what kinds of work you are good at and enjoy, you can take the next steps to advance. That may entail vocational classes, on-the-job training and certifications or college. If you're not sure what you're good at or how to get started on a career path, find career counseling -- at your local community college, for example.
In the meantime, you can also get counseling for the best ways to deal with your debt. Instead of making big promises and taking your money, a nonprofit credit counseling agency can help you see all your options and keep guiding you until you are back on your feet.
The biggest difference between people who are financially successful and those who struggle with money their entire lives is how far they think ahead. The most successful people are always thinking ahead a year, a decade and more. You can build a bright future for yourself if you focus on not just dealing with your current debt, but on putting yourself in a place where you'll never have more bills than money to pay them, ever again.
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