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Can A Married Couple File Bankruptcy Separately

You Can File For Bankruptcy Separately But Should You

Can married couples file bankruptcy separately – Bankruptcy Lawyers Claremont

Under North Carolinas bankruptcy law, married couples have the option of filing for bankruptcy jointly or separately. There are several benefits of filing a joint bankruptcy when you are married:

  • Filing a joint bankruptcy case for both spouses would cost less than filing two separate cases;

However, you also have the option of filing for bankruptcy separately without your spouse. When one spouse files a separate bankruptcy petition, only the petitioner spouse will benefit from an automatic stay to stop collection actions, and only their separate debt incurred in their name will be discharged. Meanwhile, the non-filing spouse could still be liable for any marital debt.

Filing separately may makes sense when only one spouse incurred debt alone, and there is no jointly-held debt. Otherwise, spouses usually go for a jointly-filed bankruptcy.

Should I File Bankruptcy With My Spouse Or Solo

Submitted by the Bond & Botes Law Offices – Monday, June 1, 2020

A married person can file bankruptcy alone or jointly with his or her spouse. The better option depends on circumstances such as:

  • The type and extent of joint debts the couple has
  • The property the couple owns jointly
  • The income of each party
  • Any separate assets each party has
  • Any separate debts of the parties

If both parties have substantial debt and will need to file at some point, it may be beneficial to file jointly. Separate cases will cost double the amount of fees and expenses. It is also important to note that while a separate bankruptcy makes sense in many cases, the non-filing spouse is not entirely ignored for bankruptcy purposes. If you are married and considering filing bankruptcy on your own, it is a good idea to consult an experienced bankruptcy lawyer before making a final decision. You may not be aware of how your bankruptcy may impact your spouse or how your spouses income may impact your bankruptcy.

If Im Married Will My Spouse Have To File Bankruptcy With Me

No. Keep in mind, however, that only the person filing for bankruptcy gets the benefit of the automatic stay and the discharge. So, if you and your spouse have joint debts and only you file bankruptcy, then those creditors will still be able to pursue your spouse for collection, unless you file for Chapter 13 and propose in your plan to pay those joint debts in full.

Being married, however, does not necessarily make one obligated for the debts of the spouse. Nor does merely being an authorized user on a credit card make that person personally liable. Only the person who signed the loan documents or credit application is liable for the debt.

Make sure to carefully check your documents to see who in fact signed them. One exception to this is taxes. Filing a joint tax return makes both spouses liable for the tax, regardless of whose tax it is.

If you and your spouse own property jointly, that property may be subject to liquidation in the rare case where the property is not fully exempt.

As far as future credit is concerned, the bankruptcy of one spouse will have some effect on the ability of the nonfiling spouse to obtain credit in the future if credit is applied for jointly. Otherwise, it should not.

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Also Check: Which Of The Following Phrases Best Summarizes Chapter 7 Bankruptcy

Community Property In A Bankruptcy Case

Even though Ellen doesn’t file bankruptcy, all the community propertyincluding her interest in the communitybecomes a part of the bankruptcy estate.

Because they’re in a community property state, community property that is not exempt; could be seized by a trustee and sold to benefit Mark’s creditors. If Ellen chooses to file bankruptcy also, depending on the state, she can apply her own set of exemptions .;

How Is The Means Test Calculated If I’m Separated Or Divorced

How to File Bankruptcy Separately When Married ...

Every person who files for bankruptcy must have their financial situation evaluated by the means test and disclose all sources of income. Anyone who files for bankruptcy, no matter what their marital status, has the right to file individually.

Heres how the means test works:

  • Monthly Income The means test compares your monthly income to your countys median monthly income. If your monthly income is less than your countys median income, then you are automatically eligible for Chapter 7 bankruptcy.
  • If your monthly income is more than your countys median income, then the bankruptcy court will further review your financials, as well as the disposable income you have left after paying your monthly expenses.
  • Disposable Income If the court determines that you do not have enough disposable income to pay back your debts through a monthly payment plan, then you will be eligible to file for Chapter 7 bankruptcy.
  • If you do have enough disposable income to pay back some of your unsecured debts, then you may be eligible to file for Chapter 13 bankruptcy.
  • The means test can be complicated and is a critical component to the bankruptcy process. Having an experienced bankruptcy attorney to guide you through the means test can make all the difference in your case whether filing for joint bankruptcy or as an individual.

    Recommended Reading: When Does Chapter 7 Bankruptcy Fall Off Credit Report

    Can I File Bankruptcy Without My Spouse In 2021

    4 minute read ⢠Upsolve is a nonprofit tool that helps you file bankruptcy for free. Think TurboTax for bankruptcy. Get free education, customer support, and community. Featured in Forbes 4x and funded by institutions like Harvard University so we’ll never ask you for a credit card. Explore our free tool

    In a Nutshell

    Yes, you can file bankruptcy without your spouse. A variety of factors play a role in determining whether filing bankruptcy with or without your spouse makes the most sense for you. This article will explore some of these considerations, then provide you with an overview of how to file bankruptcy without your spouse.

    Written by Attorney Eva Bacevice.

    Yes, you can file bankruptcy without your spouse. A variety of factors play a role in determining whether filing bankruptcy with or without your spouse makes the most sense for you. This article will explore some of these considerations, then provide you with an overview of how to file bankruptcy without your spouse.

    How Will It Affect My Spouse If I File A Separate Bankruptcy In California

    COVID-19 UpdatePlease see here06/18/2021

    If you are married and living in California and are considering filing bankruptcy, you can do so individually without your spouse or file jointly with your spouse. Lets take a look at the impact of filing bankruptcy individually in California, whether its advisable and how it will affect your spouse.

    Article at a Glance

    • You can file for a bankruptcy in California either jointly with your spouse or individually.
    • California is a community property state, and even if you file bankruptcy separately without your spouse, your community property is protected. Creditors cannot come after any part of it as long as you are married.
    • If you file individually and your spouse does not file, they may not suffer the same negative impact on their credit reports.

    Contents

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    If Filing Bankruptcy Consider Spouses Assets

    Beyond just debt, another issue for married couples to consider when evaluating bankruptcy is how assets are held. If one spouse owns property in her name only and doesnt file bankruptcy, it wont become part of the bankruptcy estate.

    This could be an important factor depending on the value of the asset, because Chapter 7 is technically a liquidation. All the property you own that exceeds the value of your states exemption laws is subject to sale by the bankruptcy trustee. However, the trustee only has jurisdiction over the property of the party that files. For example, a wifes home that is only in her name does not become part of her husbands bankruptcy estate.

    Joint Debts In Chapter 13

    Can you file bankruptcy without your spouse or significant other?

    In a Chapter 13 filing, the non-filing spouse shares in the benefits to a degree. Thats because if the filing spouse includes a joint debt in the Chapter 13 plan and the plan is confirmed, the automatic stay will usually continue to protect the codebtor spouse for as long as the filing spouse makes timely payments and otherwise complies with the plan. For example, if the husband filed for bankruptcy and included $5,000 in joint credit card debt in a five-year repayment plan, the automatic stay would typically remain in effect and prevent the creditor from attempting to collect from the wife–even though she had not filed.;

    However, if the bankruptcy case fails or if plan payments do not cover 100% of the outstanding debt, the non-filing spouse could still be on the hook to pay the remaining balance.;

    Read Also: How Soon After Filing Bankruptcy Can I Buy A House

    What Is The Effect On The Automatic Stay When Only One Spouse Files

    The automatic stay protects you from creditors as soon as your bankruptcy case is filed. It stops almost every legal action, including a garnishment, foreclosure, repossession, and any debt collection lawsuit.

    When you file for Chapter 7 bankruptcy, the automatic stay only applies to you. If you file without your spouse, theyâre not protected. If you file a Chapter 13 bankruptcy, there is a co-debtor stay, which protects anyone else listed on your debts.

    In a community property state, the automatic stay extends to the community property of married couples. This generally means that the non filing spouseâs wages canât be garnished for a community debt.

    Is My Spouses Property At Risk In A Community Property State

    Yes, in community property states, more of your spouses property is at a greater risk when filing for personal bankruptcy. If you choose to file by yourself, youll need to ensure you have the right exemptions to protect shared property. In many cases, it is wiser to file with your spouse as some states offer double exemptions on community property to spouses who file together.

    You may also be asked to reveal any separate property of your spouse in your bankruptcy papers. This is done to ensure that all property listed as separate is truly owned by the other spouse.

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    Choices For Filing For Bankruptcy In Texas: Filing Separately

    So filing separately for bankruptcy when married might be a good idea if the couple does not have much community property and only one spouse has acquired most of the debt. This way, the spouse who did not accrue the debt can avoid filing for bankruptcy in Texas and can keep his or her separate property safe from the process.

    Further, even if a couple wishes to file jointly, only one spouse may be eligible to do so if the other spouse had filed for bankruptcy recently .

    A Plano Bankruptcy Lawyer Can Help Evaluate Bankruptcy Choices When Married;

    While the emotional aspects of financial stress are very real and need to be dealt with, the legal side of debt crisis also needs to addressed. A couple that is living with frequent debt collection calls, letters, garnishment of wages and other stressful situations can take steps to remedy the credit issues and move on with their lives by filing for bankruptcy in Texas.

    Bankruptcy can be a confusing and difficult time for a married couple and its not the best choice for everybody with financial problems. But with the proper legal guidance and support from Plano bankruptcy lawyers, one can evaluate choices and come through the process successfully, whether you file jointly or separately for bankruptcy when married.

    When Joint Filing Might Make Sense

    Can One Spouse File Bankruptcy Without Other ...

    If you file jointly for bankruptcy, all property of both spouses is part of the bankruptcy estate, and all debts of both spouses are included in the filing. If both of you are facing debt trouble, either as a couple or separately, and considering bankruptcy, filing jointly allows you to put all of your information on one set of forms, pay only one filing fee, and pay only one lawyer .

    Filing jointly might be the best option in certain situations, including these:

    • You live in a community property state , most of your debts were incurred during marriage, and most of your property was acquired during marriage. In community property states, everything earned during the marriage and all property bought with those earnings are community property, and debts incurred during the marriage are community debts. Whether both spouses file or only one, all community property and debts will be part of the bankruptcy case. In this situation. filing jointly allows both spouses to discharge their separate debts and to take part in decisions that will affect their jointly-held property.
    • Your state’s exemption laws allow spouses to double their exemptions. If doubling exemptions will allow you to keep property you would otherwise lose, filing jointly might be a good idea.

    Recommended Reading: Filing Bankruptcy In Wisconsin

    Will My Spouse Be Responsible For Joint Debts If I File An Individual Bankruptcy Case

    In the case of joint debts, an individual bankruptcy filing does not protect your spouse from debt collections for joint debts. An individual bankruptcy filing only impacts your personal liability for the debt.; Creditors cannot attempt to collect discharged debts from the debtor.

    However, if your non-filing spouse is a co-debtor, the creditor can take all legal actions to collect the unpaid debt from your non-filing spouse. Actions include, but are not limited to, debt collection lawsuits, wage garnishments, repossessions, foreclosures, levies, and seizures. The creditor may need to wait until your bankruptcy case is closed, or it can petition the court to proceed with collections against your spouse for the joint debt.

    It is important to read the credit agreement for each debt before filing bankruptcy. In some cases, your spouse could be responsible for a supplementary cardholder account. A supplementary cardholder has a credit card in his or her name with the same account number assigned to you as the primary account holder. This situation usually happens when a spouse applies for credit and answers yes when the company asks if the person wants a card for his or her spouse.

    How Do Credit Reports And Scores Work If One Spouse Files Without The Other Spouse

    As explained above, if the debt is in your name only, filing an individual bankruptcy case should not impact your spouses credit in any way. The debt should not appear on your spouses credit report.;

    It is a good idea for your spouse to pull a free copy of his or her after your bankruptcy case is complete to verify that creditors did not incorrectly report information from your bankruptcy case on your spouses credit report.;

    However, if your spouse is a supplementary or secondary cardholder, you need to check your credit agreement. If your spouse is responsible for the debt, filing an individual bankruptcy case will impact your spouses credit rating in the same was a joint debt.

    If your spouse does not pay the joint debt, the creditor reports the delinquency on your spouses credit report. The late payments and collection efforts hurt your spouses credit score. If your spouse does not pay the debt, the creditor can pursue legal actions. You can resume payments to the creditor after your bankruptcy case is closed to prevent adverse consequences for your spouse.;

    Read Also: Chapter 7 Falls Off Credit Score

    A Las Vegas Bankruptcy Attorney Can Answer Your Joint Filing Questions

    At Vohwinkel Law, our Nevada bankruptcy attorney has the skills and experience to help spouses navigate the bankruptcy process. Whether you and your partner are preparing a joint bankruptcy petition or only one of you needs to file for bankruptcy, we are more than ready to help. Our goal is to help you find the best path forward. Contact us today for a free, no obligation initial consultation. From our office in Las Vegas, we handle spousal bankruptcy cases throughout Southern Nevada, including in Henderson, Paradise, Summerlin South, North Las Vegas, Enterprise, and Boulder City.

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    Can A Married Person File Taxes Without Their Spouse

    Married Filing Separately rules

    Upsolve is a nonprofit tool that helps you file bankruptcy for free.Think TurboTax for bankruptcy. Get free education, customer support, and community. Featured in Forbes 4x and funded by institutions like Harvard University so we’ll never ask you for a credit card.Explore our free tool

    In a Nutshell

    A married couple filing income tax returns can choose to do so married filing jointly or married filing separately. In the past, the primary reason for filing separate tax returns was to shield one spouse from the tax liability of the other spouse. Couples filing separate returns paid much more in income taxes than couples filing joint returns. Today, with tax law changes, there are situations where filing separately can result in a lower combined tax burden.

    Written byAttorney John Coble.

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      What If We Want To Apply For Joint Loans Or Credit Accounts Together In The Future

      You and your spouse will still be able to apply for joint loans or credit accounts in the future. For a while, your bankruptcy filing may impact your ability to get a joint loan with good terms. But, most people with poor credit who file for bankruptcy see their when compared to people with poor credit who remain in debt. So, as you rebuild your credit score, you’re ability to get favorable terms on new loans will increase as well.

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