There’s this couple I know (haha) where the husband runs a small business and makes decent money but his income fluctuates somewhat. The husband pays most household bills, including the mortgage and HELOC. The couple’s house is in the name of both spouses, but the husband is solely liable on the notes. In addition, the husband gives the wife a monthly allowance which adds up to about $15 to $20k per year.
The wife has her own job from which she takes home about $30 to $35k per year. Unfortunately, the wife has a bit of a spending problem and has run up $40 to $50k in credit card debt. The husband is reluctant to help the wife with this debt since he wants to save money for their childrens’ college; retirement; etc. He fears that a bailout will not accomplish anything in the end.
Anyway, the question is this: Is the wife eligible to file for bankrupcty? i.e. would a bankruptcy court consider the husband’s income in assessing the wife’s means and ability to repay? Second, if the wife does file bankruptcy, what would the practical effect be on the family finances?