#1 Must the Non-Filing Spouse’s Information Be Disclosed?

16 Nov #1 Must the Non-Filing Spouse’s Information Be Disclosed?

#1 “Must the Non-Filing Spouse’s Information Be Disclosed?

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This continues the series “I’m Filing, My Spouse Isn’t-What Happens?” The series is introduced here.

Let’s start by remembering the context of a review of a bankruptcy petition by angry creditors or the United States Trustee’s office, for example. For one thing, the Means Test might be needed to determine whether there is a presumption that there is enough disposable income available to give unsecured creditors enough payment under a Chapter 13 plan such that permitting a Chapter 7 could be considered an abuse of discretion.

But even if the Means Test is passed, and no presumption of abuse arises, or, alternatively, if this is a non-consumer bankruptcy and the Means Test is not even required, abuse can still be found given “the totality of the circumstances”.

The income and assets of the non-filing spouse are important in both those considerations. If the debtor has legal rights to share in the income and assets of a non-filing spouse or even if the practice has been between them to share income and assets regardless of legal rights, a policy decision in the bankruptcy law was made that the Debtor’s access to the non-filing spouse’s income and assets has to be considered in deciding whether permitting a Chapter 7 bankruptcy would be an abuse.

And remember, you will be signing your bankruptcy papers under penalty of perjury and potential criminal prosecution – the penalties can be severe. If the information is asked for, it must be disclosed.

Next in the series: What If My Spouse’s Assets Are Separate-Must They Be Disclosed?

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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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