Filing Bankruptcy Without Your Spouse In Arizona
Spouses typically apply for loans and credit cards jointly, in both of their names. This makes each of them contractually liable for the debt. But occasionally debt is taken out in only one spouses name during marriage. In these situations, the spouse named on the debt is contractually liable for the debt, and the other spouse is not. People often mistakenly assume this means the un-named spouse has no liability for the debt, and therefore need not consider filing bankruptcy if the debt isnt paid. Unfortunately, that is not a correct assumption here in Arizona.
Can I File For Bankruptcy Without My Spouses Knowledge
Simply put, it would be possible for one spouse to file for bankruptcy without the other partner ever finding out. However, Chapter 7 bankruptcy utilizes income as a test for eligibility. It also uses income garnishment as a means of settling debt.
As such, the non-filing spouse would most likely notice if the bankruptcy court fordebt repayment is garnishing their paychecks. Outside of Chapter 7 bankruptcy, there are many other ways for a spouse to discover their partnerâs financial situation.
Should I File Bankruptcy Jointly Or Individually In California
There are many factors that enter into whether or not its most beneficial to you to file jointly or individually in California, and they depend on your specific circumstances. But here are two to consider:
- In California, you may be able to take more in the way of exemptions if you file with your spouse, which is a good reason for filing a joint bankruptcy for many people. If you cannot exempt all property without filing jointly, then filing jointly with your spouse may be the better course. Discuss this with your attorney, because you have options regarding exemption methods in California.
- Since creditors cannot come after your community property even if just one of you file bankruptcy, it may be to your advantage to file individually in order to preserve your spouses good credit rating.
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Can I File For Bankruptcy If I Share Debts With My Spouse
Joint debts are one factor that impacts the ability of a single spouse to file for bankruptcy. If there are shared debts, it may be best to file bankruptcy as a married couple . If only one spouse files for bankruptcy when there are joint debts, the bankruptcy discharge may impact your spouse financially. Additionally, your spouse will still be liable for the shared debts that are discharged in the one spouses bankruptcy. Meaning, creditors may still pursue your spouse to collect these debts.
Preserving The Other Spouses Credit Record
A common reason given for one spouse not wanting to file is to protect his or her credit record. Thats a sensible enough goal. And not only for the non-filing spouse. If it works the couple itself could benefit through the non-filing spouses subsequent access to credit on behalf of their household. That non-filing spouse may even be able to help the filing spouse re-establish his or her good credit through co-signing of new debts and such. Many times when one spouse has a small amount of debt, we suggest leaving them out of the bankruptcy.
But be careful with assumptions about being able to keep the others bankruptcy filing completely out of the non-filers credit record. This is especially if you have a joint debt or two, including ones that you intend to continue to pay and keep outside the bankruptcy case, such as a home mortgage or vehicle loan. Although credit reporting agencies are not supposed to refer to a co-debtors bankruptcy filing in the non-filers credit reports, dont simply assume that will happen appropriately. Mistakes like this happen a lot, and your attorney can tell you how to address it.
So its all the more important for the non-filing spouse to review his or her credit report before the other spouses bankruptcy is filed and then very regularly thereafter to make sure theres no reference, directly or indirectly, to the bankruptcy case.
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Expenses That Qualify For The Marital Adjustment Deduction
Individual bankruptcy courts tend to interpret the marital adjustment deduction differently from one another, so expenses that qualify may differ from jurisdiction to jurisdiction. However, there are some common expenses that usually qualify:
- Mortgage payments on properties the non-filing spouse solely owns
- Car payments and similar expenses tied only to the non-filing spouse
- Child and spousal support the non-filing spouse must pay
- The non-filing spouses payments to any creditors for individual debts
- Taxes, insurance payments, and retirement contributions the non-filing spouse makes
As you can see, the expenses that may qualify for the marital adjustment deduction can add up quickly to make a significant dent in your households reportable monthly income. To determine exactly which parts of your spouses income you may be able to deduct, speak with an experienced Chapter 13 lawyer.
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What Are The Different Kinds Of Bankruptcy
There are two types of bankruptcy that you can file as an individual or couple. Chapter 7, also known as fresh start bankruptcy, is the most common bankruptcy. Chapter 13, also known as wage earner or debt reorganization bankruptcy, may be the right option if you earn too much to qualify for Chapter 7.
Chapter 7 BankruptcyThis is a personal liquidation of your assets to pay off some of your debts. Any remaining debt is usually discharged under Chapter 7. Many or all of your assets such as your house and vehicles do not have to be liquidated. Many Chapter 7 bankruptcy filings are no assets cases, where none of the assets have to be sold to pay your debts.
Chapter 7 is usually more advantageous for the filer, though not everyone qualifies. There are certain income requirements using the bankruptcy means test for someone to qualify for Chapter 7. One calculation determines whether your income is below the state median for your household size. This calculation must be made before filing. If you do not qualify for Chapter 7, then you will likely want to pursue Chapter 13.
One advantage of Chapter 13 is that you can keep your home, even if it is in foreclosure or you are behind on your payments. You can stop foreclosure proceedings under Chapter 13 and work out a longer mortgage repayment plan than the current mortgage holder would typically allow.
Bankruptcy And Your Partners Belongings
Your partner should be able to keep all of their assets if you declare yourself bankrupt. This means they wont have to give up any of their wages or savings, high-value possessions they own themselves or their shares in any property.
If you own things together say a vehicle your partner can either buy out their share or it will be sold. They will receive their half of the money when it is sold and the other half will be put towards the bankruptcy.
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How Does Bankruptcy Affect My Spouse
If a husband files bankruptcy without his wife, only the husbands debts are discharged. If the debts are held jointly, the non-filing wife will still owe even after one spouse has filed bankruptcy.
The bankruptcy filing will appear on the husbands credit report, but should not appear on the wifes. If a non-filing spouse receives an adverse rating on their credit score as a result of their spouses bankruptcy, the matter should be addressed immediately with the credit reporting agencies. A non-filing spouse should not have their as a result of their husband or wife filing for bankruptcy.
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You Have Differing Credit Scores
It is true that your credit score will see a slight dip after filing for bankruptcy, however, most people do experience an increase shortly after. This being said, if you file with your spouse, both of your credit scores will decrease. Adversely, if you file alone, only your score will decrease. This can be helpful if your spouse has an average or above-average credit score that wouldnt be affected if you file.
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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.
However this only a general rule. Many states recognize a concept known as equitable title. If your state is one of them, sometimes a house or other property not in your name can be administered by your bankruptcy trustee. This is complicated stuff and you need to discuss this concept with qualified legal counsel.
File For Bankruptcy In Florida Without Your Spouse
If you are married and are considering filing for bankruptcy on your own the form you choose is important. You can file for both Chapter 7 and Chapter 13 if you meet the criteria. The one that is best for you depends on a few different things. In both cases, the courts consider both spouses income. In Chapter 7, in which debtors liquidate assets to pay off debts, if both incomes exceed the income level set by law, you may not qualify for this type of bankruptcy.
Alternatively, Chapter 13 may offer debt relief for you or your spouse. In this type of debt relief, a trustee sets up a monthly payment plan to pay down your or your spouses debts. The amount of the payment depends on both spouses incomes.
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Gifting And Selling Items Of Value To Your Spouse During Bankruptcy
Its important to note that you must not give or sell any items of value to your spouse to leave them out of the bankruptcy. This is bankruptcy fraud and is an offence. If you are caught doing this you could be fined or even sent to prison and the bankruptcy restrictions that last for the 12 month period of the bankruptcy could be extended for up to 15 years.
Can I File For Bankruptcy Without My Spouse
Many individuals are concerned that filing for bankruptcy without their spouse could affect their spouses credit score or finances and the property they share, and ultimately end their marriage. This post is to address some questions for people who are considering filing for bankruptcy without their spouse.
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What If I Share Debts With My Spouse
If you and your spouse are on a shared account, then only your obligation to pay the debts is erased. Creditors will still be able to come after your spouse for the debts. Your bankruptcy may also show up on your spouseâs credit report, although it should not affect your spouseâs credit score as long as they remain current with all the payments.
Common Law Property States
In common law property states, any assets that your spouse acquired separately during the marriage are not considered part of the bankruptcy estate.
This means that their individual assets will be protected.
For jointly owned property, only your share of the property will be used to pay back your creditors.
However, if the property cannot be divided, these jointly owned assets can be sold by the bankruptcy trustee to pay off your debt.
The trustee will then pay your spouse their share of the proceeds, while your share will be used to pay off your debts.
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All Debts Are In One Spouses Name
This happens often either in a relatively new marriage, or one in which one of the spouses had operated a failing business. The person with little or no debt doesnt want to participate in filing bankruptcy if its not necessary to do so. And often the person with the debt, out of guilt or sometimes more noble motives, wants to avoid harming the other person any further by dragging him or her into a bankruptcy case.
In a newer marriage, the couple may come to realize that the debts of one of them are now hurting their joint financial lives. Possibly the financial stress is jeopardizing the marriage itself. That is especially true if the person with the debts either was not candid about the amount of debts he or she was bringing into the marriage, or has continued to use credit within the marriage without the full knowledge of the other spouse.
Sometimes one spouse never had a credit score adequate to be approved for debts like car loans and home mortgages, so all the debt will be in the other spouses name.
In a marriage in which one of the spouses has been operating a business, theres more of a tendency for a large portion of the debt to be in that business-operating spouses name.
It is often more difficult than youd think to know for sure whether one spouse is or is not liable on a debt. Being an authorized user sometimes creates liability, and sometimes doesnt.
When Does Bankruptcy Makes Sense For My Family
If creditors can collect from jointly owned assets, bankruptcy might be a good way to protect those assets. However, your spouse’s income will be included in the bankruptcy, which might make it harder to qualify for Chapter 7 bankruptcy and might affect how much you must pay to unsecured creditors in Chapter 13 bankruptcy.
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How Does Filing Bankrcupty Affect My Spouse
Does my bankruptcy affect my spouse?
A married person in overwhelming debt, and who has to file bankruptcy, startswondering if bankruptcy should be filed with or without the spouse. Theyworry about how their decision impacts their family, and are especially worriedabout its implications on his or her spouse and their credit report.Some even worry about their spouse losing their job or that both partners areobligated to file for bankruptcy. They usually end up having these questionsrunning in their head, and look for answers to them:
Will filing for bankruptcy affect my spouse’s credit?
Answer: Mostly like NO. This is the biggest concern of individuals filing for bankruptcy. Howevereveryone, married and single, have separate credit bureau files connected totheir social security number. So as long as the spouse isn’t a co-debtor, or legally liable for the same debt, filing for bankruptcy to eliminate debt won’t affect the spouse’s credit score.But if the couple has joint debts and if the non-filing spouse is a co-debtor thenthey have more to worry about besides a negative report on their credit score.This is because when a spouse files for a Chapter 7 bankruptcy to discharge thejoint debt, there’s a chance of it appearing on the other spouse’s credit report. So the creditor can take immediate action against the non-filing spouse. Besides, creditors will be notified about the spouse’s bankruptcy status and may bother the non-filing spouse to collect joint debts.
Things You Should Know If You Are Married But Want To File Bankruptcy Alone
| Oct 18, 2017 | Uncategorized
This post lists three things you should know if you want to file for bankruptcy without your spouse. Contact Phoenix Law for more information today.
Using bankruptcy to help you get out of debt is something you could consider if you are overwhelmed with bills you cannot pay. If you are married, but you are considering filing individually, without your spouse, here are some of the main factors you should know before you sign the bankruptcy documents.
1. You Can File Individually If You Are Married
Married couples have the freedom to file for together or individually. Couples typically file together when they have joint debts, but spouses can file by themselves if they choose to.
There are several reasons a spouse might want to file individually, and you might have your own reasons. For example, if you want to buy a house in the near future, you could prevent damage to your spouses credit if you file individually, and put the house in only your spouses name.
If both spouses want to file for bankruptcy, it is always better to file jointly. By filing jointly, you can pay just one filing fee and one fee for the legal assistance from a lawyer.
However, it is important to understand how filing individually could affect your spouse, and you can find out more about this by meeting with a bankruptcy lawyer.
2. Joint Debts Do Not Get Fully Discharged
3. Your Spouses Income Counts
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