Wife and I have been separated for 21 months now. (House is in her name only as she owned it prior to our marriage. She stayed in the house but never made any payments after we were no longer together. She has now received foreclosure papers and stated she needs to file bankruptcy. She hinted that I might want to do this also as "my name is on some accounts she is filing against". I assume this means that she took out credit cards without my knowledge and I'm sure they are maxed out. Am I responsible for these debts? She also filed a joint tax return in February using online tax software and had all the money sent directly to her bank account. I didn't know that she did this until I went to file a "married but filing separately" tax return. What are my recourses if any???
You have a lot going on here. I am not licensed in Indiana, bugt assuming they are an equitable distribution state the law is that property owned prior to marriage is separate property. Did your wife add your name to the deed or did you re-mortgage it with both your names? If the answer is no, then really you do not care if the bank forecloses or not - it is not your property and will not be on your record.
You also may or may not need to file bankruptcy.
I am not a tax attorney or CPA. I can't make a blanket rule for all cases, but I only see problems with "married filing jointly" in cases where people are headed for divorce court. You need to see an tax attorney or CPA to see if you can file amended returns for your last tax year or can use the "innocent spouse" rule so that you will not be liable for any taxes owed to the IRS. You do not want to mess with the IRS so make this a priority.
Regarding the credit cards, you are divorcing. If the credit cards are in joint names (meaning that you are a co-borrower and not just an authorized user) (you could be a co-borrower if your wife forged your name), then you have a choice to make. What your wife has done is a crime but its up to the credit card companies or law enforcment to prosecute or not. If you dispute your liability with the credit companies, they will ask you to fill out a fraud affidavit and it will help if you get a police report. In fact, you will need the police report to get a free copy of your credit report so you can see exactly what is on there and contact the creditors/collection agencies to dispute debts that are delinquent and not yours. If your wife is prosecuted, then so be it.
If you do not want your wife prosecuted and, if you are a co-applicant, then you will be accepting liability for the debt. Its not fair, but that is your choice if you don't want the wife prosecuted. If you do not file bankruptcy in such case then the credit card companies will look to you for payment.
However, if you were just listed as an authorized user, then your wife can remove your name from the credit cards. In such case, there is no fraud, you are not liable for the debts and you will not have to file bankruptcy.
I think its time for a come-to-Jesus co-applicant, do not tell her what you are going to do. You can give her the option of correcting it. If she refuses, then go to the police and get an identity theft report. Go to www.privacyrights.org and see fact sheet 17a - follow that. You will need to write to each of the credit bureaus, tell them you were the victim of identity fraud and send them a copy of the police report. When you get the reports, contact the creditors or collection agencies in writing who are listed and tell them that this was identity theft and give them a copy of the police report. They will send a fraqud affidavit to you and you will have to complete and return it.
