Our Best Tips For Filing For Bankruptcy Without Your Spouse

22 Aug Our Best Tips For Filing For Bankruptcy Without Your Spouse

If you’re thinking of filing for bankruptcy without your spouse, follow these steps to avoid pitfalls.

Filing for bankruptcy means disclosing your assets, property, debts, and household income.

For most people, that’s a fair trade-off for getting out of debt. But if you’re married, you may not be comfortable with the impact on your spouse.

Thankfully, the bankruptcy laws reflect the fact that in the real world, you and your spouse may not share everything with one another.

Here are our best tips for filing for bankruptcy without your spouse.

Consider Filing For Bankruptcy With Your Spouse

Before, looking at how a bankruptcy case plays out if you file alone, think about whether filing jointly is a better idea.

If you both file for bankruptcy you’ll be able to handle all of the debts in the household, as well as double all of your exemptions in bankruptcy.

What You Need To Know If You File Alone

  • If you file separately but are not legally separated, your bankruptcy lawyer will still need your spouse’s income for the past six months. This is to calculate total household currently monthly income for the purposes of the means test;
  • Your bankruptcy lawyer will also ask your spouse to complete a statement of his or her separate expenses. This will help calculate the amount of your spouse’s income that is used to pay household monthly expenses;
  • If you are legally separated and decide that filing for bankruptcy is right for you, we do not need any information whatsoever from your spouse;
  • If your spouse doesn’t provide the income and expense information, your bankruptcy attorney will need to file additional documents that outline the lack of cooperation;
  • Your bankruptcy won’t appear on your spouse’s credit.

Special Rules For Community Property States

  • If you live in a community property statement and are separated but not legally separated, the legal presumption is that all income made by each of you is still community income;
  • If you file for bankruptcy on your own, you may still be impacted by your spouse’s unpaid debts;
  • Your non-filing spouse will have some protection against creditors for debts you also signed for and for which you get a discharge, so long as he or she is still married to you and you are alive. Once there is a divorce or you die, creditors can go against the non-filing spouse for debts for which you received a discharge; and
  • If you file for bankruptcy without your spouse and have a joint debt, the creditor cannot enforce the debt as against your spouse’s community property for so long as you remain legally married.

Filing For Bankruptcy Without Your Spouse Takes A Steady Hand

It’s important to talk about your financial decisions together, and make a plan that works for the entire household – not simply one of you.

Even if you both don’t end up filing together, make an appointment to meet with an attorney. Get the facts, map out a plan of attack, and move ahead.

In the long run, you’ll be glad you did.

Image credit:Jan Tik

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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