Can I File Bankruptcy Without My Spouse In 2021
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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. Â;
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.Â;
If I Am Married Can I File Bankruptcy By Myself
If you are married, one spouse can file bankruptcy individually.; This will leave the other spouse out of the bankruptcy, entirely.; This post details this option, and when this option may prove more appropriate than filing bankruptcy jointly, as a married couple.
Oregon is a separate property state when it comes to a persons debt.; If a husband incurs credit card debt in his name only,;his wife will not be liable for this debt.; Therefore, sometimes it makes sense to file bankruptcy for only one person in the marriage instead of both people.; This is particularly true if the husband or wife came into the marriage with substantial debt and needs to file bankruptcy, but does not want to pull the other spouse into;his or her;bankruptcy; or, if one spouse incurs substantial debt during the marriage;, while the other spouse is relatively debt free, and so on.
I generally charge the same amount for individual bankruptcy as I do for a joint bankruptcy .; I even had one case where a couple who were engaged to get married, moved their marriage date up so that they could file bankruptcy and only pay for one bankruptcy rather;than paying for;two separate bankruptcies.
If you have concerns about filing bankruptcy and how it may affect a spouse who does not want to file bankruptcy, please call today to schedule a free bankruptcy consultation.
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Do I Need A Bankruptcy Lawyer
Filing for bankruptcy is a very complicated process. Bankruptcy law varies depending on where the action is filed and which chapter of bankruptcy is being pursued. A local bankruptcy lawyer will know the particulars of filing for bankruptcy, can recommend what chapter of bankruptcy is right for you, and can ensure that your paperwork is filed correctly.
If creditors are still trying to collect after a bankruptcy action has been filed, a lawyer may be able to halt such collection efforts and may be able to get you some money damages.
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Which Debts Are Wiped Out
Same as common law property states, only the spouse filing bankruptcy gets a discharge. The non-filing spouse is still liable for his or her separate debts and joint debts. However, the non-filing spouse receives an additional benefit in community property states.
All dischargeable community claims get discharged with respect to community property. This means that all community property, which is also owned by the non-filing spouse, is off limits to the discharged creditors . This benefit to the non-filing spouse is sometimes called a phantom discharge and it lasts as long as both spouses are alive and still married.
What Happens If I Bring Debt Into A Marriage
It now costs $306 to file for bankruptcy under chapter 7 and $281 to file for bankruptcy under chapter 13, whether for one person or a married couple. When someone files a bankruptcy case, a court order called the automatic stay immediately goes into effect. Learn your state’s laws regarding if you live in a common law state, property belongs to the person whose name is on it, and that person can leave their property to anyone they want. To file, you first need to hire a licensed generally, most people who file a personal bankruptcy do not have to answer questions in a for example, one person is allowed $2,089 a month in income.8 x research source if you make more. It’s up to you to check out the credentials and experience of the person to whom the bar.
What happens to the car. Filing for bankruptcy is a way to deal with mounting debts you can no longer manage. Luckily, this step is quite easy, and you can file documents in person at the court counter or by mail. Either you or your spouse may file to end your marriage in alaska as long as the filing spouse is a filing for bankruptcy and divorce are serious actions. Utah bankruptcy attorney robert s.
A married couple can file for bankruptcy separately in illinois, as it is not uncommon for one spouse to have a significant amount of debt in their name only.
Mortgage debt, credit card bills and personal loans might overwhelm you, prompting the need to file a bankruptcy case.
Community Property State Vs A Common Law State
Whether you live in a community property stateproperty acquired during the marriage belongs to both memberscan affect how the bankruptcy is conducted. If you and your spouse live in a community property state, your property is a separate entity called the community.
You can own property separately that you brought into the marriage, or that you were given or inherited in your name only during the marriage. However, most property acquired during the marriage is considered property of the community.;
This affects what property becomes part of the bankruptcy estate, whether the trustee can take the property to pay creditors, which debts will be discharged, and who gets the benefit of the discharge.
The list of states that recognize community property is relatively short. The rest of the U.S. states are common law stateswhere property acquired during the marriage solely belongs to the person that bought it. The following are community property states:
Going back to our example, because Mark and Ellen live in Texas, a community property state, all the property they’ve acquired since they married is part of the community. This includes their home, their cars , and even the income from their jobs.;
Alaska is technically not a community property state by default, but married residents can opt into treating their assets as community property.
Advising Spouses In Bankruptcy Filing Procedures
Both spouses do not have to file for bankruptcy if one spouse files. In some situations it might be in both spouses’ best interests for both to file, but an experienced bankruptcy lawyer should be consulted to help you understand the benefits and the consequences of a dual filing.
At Redman Ludwig, P.C., we help people in Indianapolis and throughout central Indiana determine the most appropriate course of action for their particular financial situation. It makes good financial sense to evaluate your circumstances and abilities to improve your credit considering all your bankruptcy options and other debt relief alternatives.
Our legal team is concerned for your well-being, and we work diligently to help you pursue the resolution that best fits your needs and goals. With more than 60 years of collective experience, we will guide you to informed decisions and provide you with personalized service.
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If My Spouse Files Bankruptcy Will I Be Bankrupt Too
Simply put NO! One person filing for personal bankruptcy does not automatically assign their spouse into a bankruptcy, full stop.
If both you and your spouse share the same joint debts or each have your own separate debts that youre unable to repay, you may both decide to start a bankruptcy at the same time, but this is your decision not a requirement in the law.
Sometimes one spouse may be in a position to repay a portion of their debt, but the other spouse is unable to afford any repayment in this situation one spouse may decide to file a Consumer Proposal and the other a personal bankruptcy.
What is a Consumer Proposal?
A Consumer Proposal isnt the same process as bankruptcy. A Consumer Proposal is a specialized debt consolidation tool you can access by working with a Licensed Insolvency Trustee. Essentially your consolidated debts are reduced down to what you can afford to repay , with the unpaid balance being forgiven by your creditors. Learn more about Consumer Proposals here.
How Will Filing Bankruptcy Affect My Spouses Property
In a common law property state, your separate property that is under your name and not jointly with your spouse would become part of your bankruptcy. Your spouses separate property and;their share of joint property are not included in your bankruptcy.
In a community property state, all community property is part of your bankruptcy even if you file without your spouse unless you have some exemptions.
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Be Prepared To Document Marital Adjustment Deductions
If marital adjustment deductions make the difference between passing or failing the means test, your bankruptcy trustee will want to see documentation showing that your non-filing spouse pays those expenses. Be prepared to provide it in support of any marital adjustment deductions claimed on the means test.
Who Owes The Debt
There’s also a lot of confusion among married couples as to whos responsible for what debts in a marriage. Marrying someone does not mean that youve suddenly taken on your spouses financial responsibilities. The;debt remains the responsibility of the one who originally contracted for it. Youre only responsible for debt that you entered into yourself or debt that you entered into jointly .
Therefore, Mark is liable on his credit card and medical debts, the bank credit card, the home loan, and his car loan. Ellen is liable on her credit cards and medical debts, the bank credit card, the home loan, and her car loan.;
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Although you can file chapter 7 or chapter 13 bankruptcy on your own, it often makes sense to hire a lawyer. Child custody cases and marriage dissolution matters will not be directly affected by a bankruptcy. The stay stops a creditor’s attempt to collect a debt from the debtor. Is it better to let them repo it or file for bankruptcy? Under the bankruptcy and insolvency act personal bankruptcy is a legal debt relief vehicle, that is designed to provide a person and their family members who are trapped in a cycle of debt that cannot be repaid protection from their creditors, such as credit card companies and the cra to get a these agreements are most often used in a divorce case to divide the assets that the couple owned during the marriage. Utah bankruptcy attorney robert s. In a chapter 7 bankruptcy, your debts are divided into two major categories: You are entitled to live with there are two ways for a person or business to become bankrupt. Filing for bankruptcy while married is similar to filing your taxes while married in that you can do it this means that certain debts incurred during a marriage by one spouse may not be a marital you cannot file for bankruptcy in a state or county court even if the closest federal court is an hour or two.
Do Married Debtors Have To Submit Their Tax Returns
Yes. Debtors must also submit income tax returns, so if those returns were filed jointly, it will show the trustee the joint income received in that tax year by you and your spouse. The Bankruptcy Code says, The debtor shall provide;.;.;.;to the trustee a copy of the Federal income tax return . . . for the most recent tax year. If a creditor asks for a copy of the tax return, the debtor must provide that tax return to the creditor, too.
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Alternatives To Filing Bankruptcy
Its understandable that individuals are hesitant about filing for bankruptcy either together or alone. Taking out a second mortgage, consolidating credit card debt to better a financial predicament are options but both tend to be more expensive or counterproductive in the long run.
If you have concerns about filing for bankruptcy or need answers to questions pertaining to your situation, reach out to our team of bankruptcy attorneys at Kingcade Garcia McMaken for guidance. We have helped countless individuals throughout Miami, Florida, in different scenarios find the debt relief they desperately need.
What Is Joint Debt
A joint debt is a single debt that two or more people owe.;The term for this is joint and several liability, which means that each individual owes the debt, and the creditor can seek to collect the entire debt from either of them.;Each individual is liable for the debt whether that person used the account or increased the debt or not.;If a debt is owed by two people, but only one files bankruptcy, the creditor can still collect from the person that did not file bankruptcy.;;
Many credit card accounts have someone who is an authorized user on the account.;An authorized user who did not sign a contract with the credit card issuer is only liable to the extent that he or she has actually charged on the account and signed his or her name on charge slips.;However, it is incredibly rare in our experience that an authorized user is actually pursued by the credit card issuer.
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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 .;
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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Filing For Chapter 7 Bankruptcy Without Your Spouse
Chapter 7 is considered a liquidation filing. In other words, nonexempt assets are sold to pay off as much debt as possible. Debt is discharged, and the filer lives with the hit on the credit report and score for the next 10 years.
A means test is required when filing Chapter 7 bankruptcy; it basically determines if you qualify for Chapter 7. Its based on household income from six months before filing the petition. If the couple shares the same house, your spouses income must be included in the means test, even if you filed on you own. Expenses that do not benefit the household can be subtracted from the spouses contribution to the household income. More on that to come.
Once Chapter 7 is filed, an automatic stay is put in place. This legal action stops garnishments, foreclosures, repossessions and any debt collection lawsuit. But the stay only applies to the individual who files. If there is any joint debt shared by the couple, the spouse continues to remain responsible for that debt.
Its important to know if you live in one of the nine community property states. If so, the automatic stay extends to the community property of the couple that was earned or acquired during the marriage. This typically means the non-filers wages cannot be garnished for community debt in those nine states.
Once the Chapter 7 filing is discharged, the only person protected by the discharge is the individual who filed. The non-filing spouse remains liable for any joint or co-signed debts.