My wife in mulling a bankruptcy filing in NY ?

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Q. My wife in mulling a bankruptcy filing in NY ( total of $45,000 in credit card and car loan debt). She racked up these balances prior to our wedding last year. My credit is excellent, and the house is in my name. We do not have any joint financial accounts (although we do file a joint tax return). In the event of a bankruptcy, can her creditors come after me? Also, she has a lawsuit stemming from an earlier car accident pending in the legal system. Assuming she files bankruptcy, what will happen if she subsequently collects any damages? Will the court deflect those proceeds to her creditors?

A. If they think the two of you have joint assets, they can try--- especially if she put money into the house. There may be some attempts to try to establish that your assets are in fact hers as well... The short answer is Yes. One of the many questions your wife will be forced to answer will be whether she has any lawsuits pending. The proceeds, if any, would of course be one of her assets. If the trustee thinks she has a good chance of getting a payoff, he can (and most likely will) hold the proceedings up until the payoff arrives. If she is a defendant in related lawsuits, the plaintiffs would be her creditors if she lost and they won. BTW, if you can spare the $45k (which is a large sum of money), one option might be to pay off the debts and be done with the whole thing.

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