There is really no way to have your stepson “removed” from the debt. If he is legally liable for the debt unless he pays the debt or also files bankruptcy, the creditor can pursue him for payment. If your stepson was included as a defendant on the lawsuit that was filed against your wife, the creditor likely has a judgment against both your wife and your stepson, and the creditor may be able to proceed with execution of its judgment against your stepson, which could involve garnishment of his wages, levies being place on any bank accounts or investment accounts listing him as an account holder, and liens being placed on any property he owns, depending on your state’s laws. While it is possible that the creditor will not take any action to enforce the judgment, the creditor could decide to enforce its judgment at any time. To learn more about what assets are exempt from creditor execution in your state, you may visit http://www.bills.com/collection-laws.
While the exemptions listed on this site specifically apply to debtors filing for bankruptcy, they also generally apply to people with money judgments filed against them. I encourage you to carefully review this information with your stepson to help you and him determine the possible consequences of the judgment filed against him. On the other hand, if the creditor did not list your stepson as a co-defendant when it filed the lawsuit against your wife, then your stepson probably does not have a judgment against him, and he may not need to worry about judgment execution action at this time. However, even if the creditor chose not to sue your stepson now, he is likely still legally liable for the debt, so if your wife does not pay the debt, the creditor may choose to sue your stepson in an attempt to collect the debt.
Your wife’s filing for bankruptcy protection will not affect your stepson’s liability on this debt. The bankruptcy proceedings should discharge your wife from liability on the debt, but unless your stepson also files for bankruptcy protection, the creditor could still pursue collection activity against your stepson. Since your stepson is liable for the debt, you may want to strongly consider paying this particular debt and not including it in your bankruptcy filing. By paying off the debt, you will relieve both your wife and stepson of liability of the account. If a judgment has been entered against your wife and/or your stepson, the creditor should file a “satisfaction of judgment” with the court to update the court records to reflect that the judgment has been paid. Once this debt is paid off, you and your wife should be able to file bankruptcy on your remaining debts. If you do not have the money to pay this account, you should seriously consider trying to borrow the money needed from a friend or family member since this debt is negatively affecting your stepson, who as you stated yourself is an “innocent bystander.” The creditor may also be willing to negotiate a settlement for less than the full balance owed if you are able to offer a lump sum–say 60% or 70% of the amount owed. If you are interested in settling the account, you will need to contact the creditor to discuss the settlement options available to you. If you are able to negotiate a settlement, make sure you obtain a written settlement agreement from the creditor before making payment on the account.
Again, I know of no way to “remove” your stepson from this debt. You will either need to pay the account, negotiate a settlement with the creditor, or your stepson will need to file for bankruptcy protection as well. These are the only available methods I know to absolve your stepson of his legal liability for this debt.
Since you are planning to file for bankruptcy, I invite you to visit the Bills.com Bankruptcy page. I also encourage you to visit the Bills.com Debt Help page to learn more about alternatives to bankruptcy available to consumers. I wish you the best of luck in resolving this debt, and hope that the information I have provided helps you Find. Learn. Save.