How Does Bankruptcy Affect Your Spouse
Assuming you file for bankruptcy without your spouse, after review by the trustee, and after either liquidation of non-exempt assets or partial repayment over three to five years , your debts are discharged. This means that bankruptcy eliminates your personal liability for debts as an individual.
However, your individual bankruptcy doesnt wipe out your spouses obligation to pay back his or her own debts or any joint debts you have together, which creditors may pursue against your spouse for the full amount. This is a strong reason to consider a joint bankruptcy filing if the circumstances warrant doing so.
One exception worth noting in Texas, a community property state, is that regarding debts you owe jointly with your spouse, creditors can only go after your spouses separate property after your bankruptcy. Since almost all property your spouse acquires during the marriage, including income, is community property, your spouse essentially will receive the benefit of your discharge as well for your joint debts. This is commonly referred to as a phantom discharge.
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Will Bankruptcy Show Up On Your Spouses Credit Report
The bankruptcy filing will appear on your credit report, but should not appear on the non-filing spouses credit report. 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.
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Bankruptcy And Your Spouse
Bankruptcy and Spouses – Divorce and Bankruptcy in Washington State
Will being married complicate my Washington State bankruptcy? What if I am going through a divorce? How is my spouse affected? Get answers today!
Washington is a community property state. That means that all debts that were incurred during a marriage in Washington to support the marital community belong to both spouses. If either spouse took out a loan, made a charge on a credit card, etc. to support the household during the marriage, its almost like the one who didnt take out the loan was a co-signer.
So, if one spouse files a Washington State bankruptcy petition and the other does not, the one who doesnt file bankruptcy may have to pay the debt anyway. Therefore, it often makes sense for both spouses to file even if one spouse did not actually take out a loan or otherwise incur a debt. If one spouse has a lot of debt from before the marriage or during a separation, then the other spouse would not be liable for that debt.
Considering both a Washington State divorce and filing for bankruptcy?
If you are getting married soon and you think you need to file bankruptcy, it would probably be a good idea to discuss the situation with a Washington bankruptcy attorney and your fiancée. Our bankruptcy lawyers can help on this front too. Often, it makes sense to schedule a meeting in order to help the new spouse to understand why filing for bankruptcy is the best option.
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Why Would You File Separately
Here are some reasons why spouses may decide to file independently:
- One spouse has already filed bankruptcy in the past 8 years.
- One spouse has all the debt and the other has none.
- One spouse owns assets free and clear and doesnt want to lose them.
- One spouse has a clean credit record and doesnt want that damaged and that spouse has not cosigned on the filing spouses debts.
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Community Property And Debts In Bankruptcy
All separate property owned by the debtor, and community property owned by the debtor and his/her spouse, must be disclosed in the bankruptcy schedules filed with the court. Therefore, if you file bankruptcy without your spouse, you must list your separate property as well as all community property. For example, if your non-filing wife purchased a vehicle while you were married, that vehicle must be disclosed in your bankruptcy schedules, even if it is titled in just her name. But you are not required to disclose your spouses separate property. With a few exceptions, the debtors separate property, and all community property, becomes property of the bankruptcy estate upon filing a bankruptcy petition. There are, however, exemptions available to protect certain assets, not only for the benefit of the bankruptcy debtor but also his or her non-filing spouse.
Similarly, all debts, both separate and community, are listed in the bankruptcy schedules. If you are filing bankruptcy without your spouse, and your spouse has a credit card in his or her name with a balance that was incurred while you were married, you must disclose it as a community debt in your bankruptcy schedules. Although you dont have contractual liability for the debt, you do have community liability by virtue of your marriage.
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Can One Spouse File Bankruptcy Alone
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Financial hardships may come at some point, and sometimes your only way out is through bankruptcy. Can you file it without your spouse?
Yes, you can file for bankruptcy without your spouse. And it makes the most sense when you and your spouse keep your finances separate, or you dont want to affect your spouses ability to file for bankruptcy in the future.
When Doesnt It Make Sense To File Without Your Spouse
Itâs rarely clear cut whether it makes sense to file with or without your spouse and in the end it depends on your financial situation and what state youâre filing in.
Here are a few common reasons folks want to file without their spouse that donât really hold up when you look at the full picture:
You donât want to impact your spouseâs credit : Unless they stay current and pay off all joint debt, their credit score will be negatively affected by your bankruptcy. Plus, your bankruptcy discharge wonât protect them from debt collectors.
You donât want to include your spouseâs property in the bankruptcy estate : All your marital assets are part of the bankruptcy estate whether you file together or not. Even if youâre not in a community property state, if you have joint property filing alone may not be enough to protect your spouseâs property interests.
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Do I Need An Attorney To File For Bankruptcy
While its true that one spouse can file for bankruptcy without the other, its important to speak with an attorney about the consequences and possible benefits.
An attorney can help you in many ways.
- help you understand community property law in Texas.
- provide you insight regarding which type of bankruptcy to file.
- offer instruction on the relationship between bankruptcy and credit score.
- and, counsel you about whether you should file jointly or separately.
The attorneys at Warren & Migliaccio, LLP in Plano know how confusing filing bankruptcy can be, and are ready to answer all of your bankruptcy questions. To set up a free case consultation today, call us now at 888-584-9614 or use our online contact form to set up an appointment to get started.
Are You Ready For A Fresh Start
When youre overwhelmed with significant debt and dont know where to turn, attorney and CPA Jerry E. Smith can provide hope and a path forward. Our law firm is focused on helping consumers solve their debt problems, including tax problems, and helping distressed homeowners save their homes. Whether youre filing for bankruptcy as a couple or without your spouse, there are various options available. We can explain bankruptcy law, answer your questions, and walk beside you each step of the way. We understand that you may be scared or ashamed, but you dont have to be. You can breathe easy. Together, we got this. Call us for a free one-hour initial consultation about your situation at 917-8680.
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Will Filing For Chapter 7 Bankruptcy Affect My Spouse
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In a Nutshell
If youâre filing for Chapter 7 bankruptcy and your spouse is not, you may be wondering whether they are going to be affected. The short answer is that if your debts are separate, their credit will not be impacted.
Written byAttorney Eva Bacevice.
If youâre filing for Chapter 7 bankruptcy and your spouse is not, you may be wondering whether they are going to be affected. The short answer is that if your debts are separate, their credit will not be impacted.
Should I File Bankruptcy With Or Without My Spouse
The decision to file for bankruptcy with or without your spouse can be a confusing and difficult one to make. While it is typically recommended to file with your spouse, it is not required, and may even be the wiser choice under certain circumstances. Below, our Tennessee debt relief team tells you everything you need to know.
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Community Property Vs Marital Property States
Many states are community property states, meaning property acquired during the marriage is considered shared regardless of who paid for it or whose name is on the title. In a community property state, property like a car or house is equally shared between the spouses and will be included in the bankruptcy even if your spouses name isnt on it.
However, Indiana is a non-community property state, also known as a marital property state, common law property state, or equitable distribution state. This means each spouse is only responsible for their partners debt if they have voluntarily joined the debt, for example by co-signing on a loan.
This is good news for Indiana residents. If you file bankruptcy without your spouse, they wont be on the hook for any debts that arent in their name. Debts that are only in your name can be discharged, leaving the two of you in a much better financial position when the bankruptcy concludes.
Disadvantages Of One Spouse Filing Alone
There are benefits to filing a joint bankruptcy that you will lose if you file individually. These include:
- If debt is in both your names, your spouse will still owe the money even if you go bankrupt.
- Ohio law allows married couples filing jointly to each claim a full set of exemptions, unless otherwise noted, in effect giving you double exemptions.
- If you have a loan on a property such as a car or home you wish to keep, and you are current on the payments and the equity is covered by your exemptions, you may continue making payments on the loan and keep this property through the bankruptcy.
- If both spouses have joint debts, the fact that one spouse discharged the debt may show on the other spouses credit report.
Be aware that if you do file jointly, you must include your combined income in the bankruptcy. Since there are income limits to filing for Chapter 7, if your joint income is too high to meet the Ohio means test, then you may not be able to qualify, and you will have to file Chapter 13.
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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.
The Debts You Wish To Eliminate
If you were to file jointly with your spouse, you would have the opportunity to eliminate the debts you both owe. To file separately would mean that only your debts would be eliminated, and your spouse would still be responsible for repaying any personal debts they incurred before you were married.
However, if you have a substantial amount of personal debt that you gained before you married, and your spouse does not, it may be wise to file separately.
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Tenancy By The Entirety
Tenancy by the entirety is a form of property ownership. Not all states recognize this provision. In those states that do, some apply it only for real property, while others apply it to personal property as well.
The owners must be marriedor in some cases, registered domestic partnersand must have acquired the property at the same time. This property is exempt in a bankruptcy case . It cannot be reached by a bankruptcy trustee except to satisfy joint debts.
The same is true for creditors. Creditors cannot force the sale of entirety property unless the parties are both liable on the creditor’s debt.
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 .
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Can You File For Bankruptcy Without Your Spouse
- Home
- Can You File for Bankruptcy Without Your Spouse?
If youre married and you live in Utah, you can file for bankruptcy alone. State law does not require you to file a joint petition with your spouse, so the choice is yours.
However, the decision on whether to file for bankruptcy individually or together is not one you should take lightly. You need to consider both your current debt situation and your long-term financial goals and in the end, the better bankruptcy filing option is the one that leaves you with less debt and allows you to keep more of your property.
For most married couples, filing a joint bankruptcy claim is the right move. But, in certain circumstances, going it alone may be best. Before you decide which route to take, consult with an experienced local bankruptcy attorney. Meanwhile, the following information may help.
If My Husband Or Wife Files Bankruptcy Do I Have To File Bankruptcy Too
No. There is nothing that requires a married couple to file bankruptcy together. Each spouse can make his or her own decision about whether to file bankruptcy, and each spouse has the right to file bankruptcy without regard to whether his or her spouse files.
However, married couples often file bankruptcy together . Most commonly, this is because married couples either have joint debt or they each have debts of their own that they want to discharge. It saves time, money, and effort to file a joint bankruptcy petition.
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What Is Chapter 13 Bankruptcy
Chapter 13 bankruptcy allows the debtor to repay part or all of their debts over the course of 3 to 5 years with any remaining unsecured debt being discharged from bankruptcy at the end of the repayment term. For debtors who are married, filing Chapter 13 bankruptcy may become complicated if they choose to file bankruptcy alone. Lets take a look at some of the problems a debtor my face.
What Is Community Property And How Does It Affect Bankruptcy
Texas is a community property state. In a community property state, any joint property owned by both spouses may be a part of the bankruptcy estate, even if only one spouse is filing the claim. In this case, one spouse filing for bankruptcy can affect the other spouse in that the spouse may lose that property.
So while one spouse can file for bankruptcy without it going on the others credit report, it cans still affect the other spouses property. The spouse filing for bankruptcy should speak with an attorney about options available to protect property when filing, such as Texas bankruptcy exemptions or federal exemptions. If all joint property is protected by bankruptcy exemptions, this might not affect the other spouse who is not filing for bankruptcy.
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