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I am finding out my wife has several delinquent cc accounts. One is for over 25K and she either ignored or never received a summons, resulting in a default judgement and subsequent receivership which resulted in her bank account being frozen. It was at this time she requested my help. The lawyer that was appointed receivership has sent a letter requesting the judge release him from the receivership and to disperse funds. They were able to able to take the $5800 from her account. I don't have a clue how to proceed with this. My wife is unable to work and I do not have the resources to take on this kind of debt. I have settled one of her cards outright, and entered into a payment plan with Midland for her other one. Both were less than 2K. What advice would anyone have for me?

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What state are you in?  This is important.  If you are in a community property stare your situation is a bit more difficult.  

Also, do you own a home and is your wife’s name on the deed?   There are different state laws as to whether they can put a lien on your property. 

Does your wife have any SSI income?

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We reside in Texas, which is a community property state. We have always had separate bank accounts, credit cards and her name is not on the deed. All vehicles are in my name. She has no income, except for money her parents send her. ($1000 monthly). I had filed for divorce 1 1/2 years ago and paid her for any equity in the home. None of which went to her debts, unfortunately. I stopped the divorce proceedings due to her health and mental/emotional state.  I would like to keep her from declaring bankruptcy, but I don't know of any other options.

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I really don't know much about Texas law.  I live in a different community property state.  A friend of mine was in a similar situation, and after the divorce he wound up getting his wages garnished for his ex-wife's delinquent accounts.  If you were NOT in a community property state, you could figure out some way to keep your money separate.  

As you are well aware, your situation would have been better if you had gotten divorced, but that is water under the bridge.  You need to figure out how to protect yourself, and to protect your wife from herself.  That is way beyond my expertise.  When my wife had financial issues, and the deed was in my name, I once had a lawyer advise me to get a paper divorce to protect my assets.  That may or may not work, since you may be liable for her debts even after a divorce.  Or not.  Speak to an attorney about that, please.  

This being Texas, the good news is they cannot garnish your wages.  

The bad news?  I really don't know what the laws are about them getting your bank accounts and putting a lien on your property.  Maybe one of the Texans on the board can chime in.

I cannot give you any legal advice, of course.  I would very, very strongly recommend you speak with an attorney as to how to proceed.  At some point you may want to figure out some way to get a power of attorney for your wife to handle her finances until her mental state improves, but that is WAY beyond my level of expertise.  And it would require the cooperation of her and your in-laws.  Or, you may wind up with a paper divorce while she declares BK, and then remarry after the BK is finalized.  That might work, or it might not.  Only a good lawyer could tell you.  

Bankruptcy may be an option.  The question is, do you have to declare BK, or can she alone? I don't have the answer for you.


Tl:dr -- you have a very complex and hazardous situation.  Talk to a good lawyer ASAP.   Maybe talk to several lawyers.  

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17 hours ago, Divot918 said:

I stopped the divorce proceedings due to her health and mental/emotional state. 

You may have to finish them.  As you said Texas is a community property state.  Even though her name isn't on the deed the house could still be considered marital property because the divorce was never finalized.  Despite separate bank accounts etc. it does not preclude her creditors from suing you as her legal spouse under community property laws.  If I were you I would make a call to the attorney who was handling the divorce initially and find out how much risk you carry and what is the best way to protect you and your assets.

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