CHAPTER #15 Can I File Bankruptcy on Bills in Someone Else’s Name?

Several interesting complications arise when people mix up their finances with others. You must disclose all such debts or assets.

You can file bankruptcy if you have joint bills. You can protect the co-signer by paying that debt, in either Chapter 7 or 13. Or if you don’t care about the joint signer, just get your discharge and send them in, or let them worry about it.

What if you have asked someone else to run up a bill, and promised to pay for it? Your obligation is only to that someone: you are a stranger to the creditor. The creditor knows of the existence of the person who got the credit, but has no idea of your promise. Therefore, you are not a debtor, except for your debt to the other person. The creditor has no obligation or demand on you, and therefore, the debt cannot be dealt with by your Chapter 7 or Chapter 13. You should list your obligation to the other person, however, so even if you keep paying it, they can’t sue you if you don’t.

In a Chapter 7 bankruptcy, you can discharge your promise or debt to repay the other person's loan, by simply listing the person on your petition. In a Chapter 13, especially if you are in possession of property that was purchased by the other person, you can deal with that property by proposing to pay the other person for it. Of course, if that person does not use the money to pay the creditor they bought it from, you may find that you will lose the property anyway, since the creditor retains its security interest in the property until it is paid.

Sometimes people transfer property to another person, or give another person money to buy something for them, either because they have no ability to borrow themselves, or because they wish to hide their ownership. This must be disclosed on your bankruptcy petition.

Often, it makes no difference if you disclose such transfers, but it is a crime to conceal your ownership in property held in another's name when you are asking for bankruptcy relief. Honesty is the policy. You are a stranger to the creditor, but since you supplied the money to the person who bought it, the other person may owe you money, and if the other person is honest, will say that it is not his property, but yours. This most often arises with cars, where a person is driving and paying insurance on a car, but the plates, title and loan are in a relative's name. Most likely, we cannot help you with that situation either, but it must be disclosed anyway.