Dist. Ct. did not err in reversing Bankruptcy Ct. order that found that defendant’s lawsuit against non-filing spouse of debtor in Chapter 13 proceeding violated co-debtor stay provisions of Bankruptcy Code (11 USC section 1301(a)), where said lawsuit sought to collect on spouse’s credit card debt. In order for co-debtor stay of legal proceedings to apply: (1) there must be action to collect on consumer debt; (2) consumer debt must be debtor’s; and (3) action to collect on debt must be against individual that is liable on such debt with debtor. Here, credit card debt of spouse was not “consumer debt of the debtor” so as to trigger co-debtor stay provisions since said debt was only spouse’s debt. Ct. rejected debtor’s claim that Wisconsin’s marital law converted her husband’s debt into her own since mere fact that non-filing spouse happens to have shared property interests with filing spouse, without more, does not make debts involved in lawsuit debts of filing spouse.
Federal 7th Circuit Court
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