Bankruptcy must be a viable solution for you but no one online can give you a competent answer without evaluating your unique situation and financial condition. One spouse's bankruptcy does not affect another spouse's credit.
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I agree with Eric's response but I also want to point out that only the person filing bankruptcy will receive a bankruptcy discharge and have their debts relieved. If only you file bankruptcy, to the extent that your wife and brother are liable for any of your debt, the creditors will be free to go after them for payment once your bankruptcy is concluded and the automatic stay is lifted. There is some protection with regard to your wife, however, in that community property assets (assets acquired during the marriage, such as wages earned) may not be seized to pay for a community property debt (a debt that was incurred by either spouse during the marriage that benefits the family unit) that was relieved in the filing spouse's bankruptcy. This means that they cannot go after your wife's community property wages, or other community property assets, to pay for any of the marital debts which were discharged in your bankruptcy, if only you file bankruptcy and she does not.
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Without doing a full analysis of your income you appear to qualify for chapter 7 and would likely pass the means test. You will have to do a careful analysis of your situation to be sure, but based on what we have in your question you appear to pass. Your wife does not have to declare bankruptcy with you and if you can demonstrate that all the debt was incurred prior to your marrying her then she would not be liable for the debt under community property laws. She is responsible for the debt you incurred after you married her, and if her name is on the credit card she is responsible for it, all of it if you do not pay it. That part of the case will require some in depth analysis. The same goes for your brother as a co-signer on the HELOC. He agreed to pay so if you do not he can be held responsible for it.
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It appears that you qualify for bankruptcy, but if your wife has income, it would need to be included in the calculations. For that reason, you should really visit with an attorney to know for sure.
You should also know that your home equity loan would be discharged in a bankruptcy, but if you want to keep your home, you will need to figure out how to repay the loan or give up the home.
Also, as the others have said, your brother will be on the hook for the home equity loan should you walk away from your home.
It would appear on the face of it that you would qualify for Chapter 7; however, as I believe was pointed out, if your wife is also earning money, you'll have to include both incomes in your analysis, even if you're filing singly. BTW, I would not file singly since as you mentioned, your wife is also liable on one of the cards.
Todd Mannis, Esq.
I agree with the commentors that you appear to qualify for Chapter 7 bankruptcy. However, you a lot of different issues going on here. For instance, is your brother potentially liable for the HELOC deficiency. Is you wife potentially responsible for the credit card debt. These, and other, questions are difficult to answer in this general forum.
I encourage you to contact an experienced bankruptcy attorney in San Francisco to discuss your case and provide you an opportunity to make a truly informed decision on bankruptcy.
I would be happy to meet with you in my San Francisco office for your convenience.
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