Married Debtors; Separate Bankruptcy Estates

by L. Jed Berliner, Western & Central Massachusetts Consumer Lawyer

May 31, 2009

Two spouses file one bankruptcy case. They get one trustee, one case number, one meeting of creditors, etc. But they are still two separate people with two separate bankruptcy estates.

Here’s why it’s important. If someone dies within six months after a bankruptcy is filed, the inheritance is property of the bankruptcy estate. However, that inheritance can only be used to pay that person’s debts, and not the spouse’s debts (unless both are beneficiaries). Anything left over goes to the debtor.

Make no mistake about this. Judges mistate the rule and will deny the surplus to the debtor unless your attorney knows this. There’s confusion out there. Don’t be a victim.

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L. Jed Berliner practices exclusively in consumer bankruptcy, wrongful repossessions and foreclosures, credit card defenses, collector harassment, and student loans. He established his Springfield, MA practice in 1988 and in Auburn in 2013. Attorney Berliner is a regular and active contributor to the Bankruptcy Law Network, the Bankruptcy Roundtable, and the National Association of Consumer Bankruptcy Attorneys, three specialized consumer bankruptcy forums on the Internet, and is an informal mentor to regional practitioners. He is recognized by his peers as an expert in consumer bankruptcy issues. He thoroughly enjoys being rated "excellent" in his client surveys.

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Last modified: February 9, 2013