Advice if Husband Incurred Large Debts

Advice if Husband Incurred Large Debts

I have a client who's husband ran up a large amount of debt, but is now estranged. Is debt settlement good option?

I have a 73 year old client who lives in a retirement community. Her husband of 40 years has a diagnosis that has caused him to be unable to handle financial affairs. He is a threat to my client and is now estranged.A restraining order is in place. Until a court order was obtained in October, the husband used 4 credit cards to obtain cash and make purchases which now totals approximately 60,000 dollars. It took months to get the court order freezing the use of the credit cards. The husband will not agree to receive help and it has been impossible thus far to declare incompetancy. The wife has been advised by her lawyer to pay the minimum amount on each credit card however the interest is so high due to much of the money being cash withdraw that the amounts get higher each month not lower. I have started investigating debt consolidation organizations however do not know which ones are legitimate. She only has control of the pension income which is directly deposited to a bank account which is approximately $6600 per month. I think this eliminates the possibility of using a refinance on the family home to pay off debt. Any thoughts you may have on this are sincerely appreciated.

First, I would encourage your client to sever any financial ties she has with her estranged husband if she has not already done so, including closing any credit cards, bank accounts, and retirement accounts (such as 401(k)s) which they hold jointly, to prevent her husband from continuing his financial rampage. She may also wish to consider beginning divorce proceedings to formally sever her legal relationship with her husband to prevent future problems of this nature. Further protection may be gained by placing a “fraud alert” or “credit freeze” (where available) on her credit reports; if she contacts the three major credit bureaus—Equifax, Experian, and TransUnion—they should be able to instruct your client on how to limit access to her credit files, which will hopefully prevent new accounts being opened in her name. To read more about identity theft, and to explore the options available to consumers to stop unauthorized use of their credit accounts, I encourage you and your client to visit the Federal Trade Commission’s website here. While reviewing this information, keep in mind that the difficulties your client is having with her estranged husband do not fit the common definition of “identity theft.” Since her husband was presumably a co-applicant or authorized user on these accounts, it is unlikely that these creditors will release your client from liability for this debt, as they would for someone whose credit cards had been stolen by an unauthorized third-party. That said, there are many possible solutions which she may utilize to resolve these debts and hopefully mitigate the damage caused by her husband’s ill-considered spending and financial decisions.

After taking steps to prevent her husband from incurring further debts, I would strongly encourage your client to consult with a qualified bankruptcy attorney in your area to help her determine if filing for bankruptcy protection is a workable option to improve her financial outlook. There are two basic types of consumer bankruptcy: Chapter 7 and Chapter 13. The type of bankruptcy that would be best for your client will depend on her income, assets, and several other important considerations. In a Chapter 7 bankruptcy, also called a liquidation bankruptcy, a bankruptcy trustee will examine her assets, and if she has any assets which are not exempt, would sell those non-exempt assets to repay her creditors. Once any non-exempt assets have been sold to pay the creditors, all remaining unsecured debts will be discharged by the bankruptcy court. Many people who file for Chapter 7 protection are able to keep all of their property because they have no non-exempt property. Each state has its own schedule of exempt assets, so your client should consult with a qualified bankruptcy attorney in your state to find out if Chapter 7 is a workable solution in her circumstances.

A Chapter 13 bankruptcy, also called a “wage-earner’s bankruptcy,” allows debtors to propose a plan to repay creditors over time–usually five years. Her monthly payment amount will be based on her monthly disposable income as defined by the bankruptcy code. After she has made payments to her creditors for five years, any remaining unsecured debts should be discharged. Chapter 13 is commonly used by debtors whose assets exceed the exemptions offered by state law. It is also used by many consumer debtors who do not qualify for Chapter 7 relief under the means test, which went into effect in 2005 with the Bankruptcy Reform Act. To learn more about bankruptcy, I encourage you and your client to visit the Bankruptcy Resources page at

You mention in your question that you have begun researching various debt consolidation and debt management firms, but that you are concerned about their reliability. You are right to be concerned about recommending your client enroll with a debt management company without conducting in-depth research about the firms she is considering. The majority of debt relief firms run good operations which help many consumers; unfortunately, a handful of unscrupulous companies have given the debt management industry as a whole a bad name in the minds of many consumers and regulatory agencies. works with several debt relief firms which we feel are some of the best providers in the industry; if you visit the Debt Help page at, you can read more about the various debt relief options available to consumers struggling with debt. In addition, if you submit your contact information in the Savings Center on most pages, we can refer you to an affiliate debt help provider who can contact you to discuss the various options available to your client and hopefully help her in resolving these obligations.

In addition to exploring the options mentioned above, your client may want to contact the creditors with which her husband incurred these debts to explain your situation and find out what assistance, if any, the creditors are willing to provide her. While I think it unlikely that the creditors will release your client from liability, it is certainly worth her time to contact the creditors to explain her situation and request any available assistance. I wish your client the best of luck in resolving these obligations, and hope that the information I have provided helps her Find. Learn. Save.