Does My Spouse Have To File For Bankruptcy With Me?

There is no law that requires a wife or husband to file a Chapter 7 Bankruptcy or a Chapter 13 Wage Earners Plan with a spouse that does not choose to file. But there are a lot of rules that may make it difficult, impossible or unwise to file without your spouse.

I know that often the bitterness of divorce can make otherwise sane people do crazy things. Don’t be one of those folks that listens to their pride, instead of their attorney. Many times one spouse has much better credit than the other. But you will probably need the advice of an attorney to figure out if one spouse can safely stay out of bankruptcy and keep their good credit.

The main thing to remember is that even if your spouse chooses not to file file with you, their income WILL be attributed to you. This is true, even if your spouse refuses to make their income information available. Not filing with your spouse can therefore have the effect of making you “too rich” to file a Chapter 7 Bankruptcy or increasing the minimum payment needed to fund a Chapter 13 Wage Earner Plan.

Filing alone also increases the cost of filing bankruptcy. Typical attorney fees in my rural Ohio area are $900.00 for a solo bankruptcy. The spouse can “ride along” for only $100.00 more. The Court costs for a Chapter 7 Bankruptcy are 299.00. A Chapter 13 has court costs of $274.00. Finally, there are mandatory “debt counseling” fees for two sessions on the internet at $36.00 and $24.00.

If your spouse chooses not to file with you, and is later forced into bankruptcy, they will have to pay their own way alone. I add up the additional fees, court costs and counseling fees to $1,259.00. That can be a terrible waste of family assets.

Another reason that you may need your spouse to file with you is “exemptions.” What if you want to keep your home? Let’s imagine that your home is worth $100,000.00. You have a mortgage of only $60,000.00. That leaves $40,000.00 in “equity.” In Ohio, you are only allowed to keep $21,25.00 in equity. So you need your spouse to join in the Chapter 7 Bankruptcy petition so their $21,625.00 exemption can be added to yours and thereby save your equity in the home from the Bankruptcy Court. You get double exemptions on everything if both spouses file together.

One final reason not to file alone is that it always attract the attention of the “U.S. Trustee.” It is considered somewhat irregular to file without your spouse. The U.S. Trustee is a very special officer of the court. It is their job to take notice of any irregularities in your petition. The attention of the U.S. Trustee is not necessarily fatal, but it is always an unwelcome hassle.

Sometimes it’ is a good idea to file alone. If you suspect that your spouse will not be truthful on a joint petition, then it may be a good idea to refuse to be on the same petition. The penalties for perjury in the Bankruptcy Court are tremendous. That’s a risk that no sensible person would take.

It may be a good idea to file alone if your spouse owes absolutely no debt and has no liability in your particular state for any of your bills. For instance, in Ohio spouses are responsible for their spouse’s medical bills and other “necessities,” even if one spouse files for bankruptcy. An attorney’s advice on these matters can be lifesaving.

There is a way to get around some of the disadvantages of filing without your spouse. That is to either live “separate and apart” or to actually file for a divorce, dissolution or legal separation. It is important you are not doing any of these things solely for the purpose of filing for bankruptcy. That will not work. Once again, it is essential to get an attorney’s advice on this matter if you are contemplating filing without your spouse.

I have one final word of advice for those who do choose to file alone. The non-filing spouse should wait about 60 days after the filing spouse receives their discharge in bankruptcy. Then they should check their credit. Credit reporting agencies are notoriously incompetent. They often list the non-filing spouse as if they had filed for bankruptcy. This is easily corrected, but you have to check.

If you want a free credit report, and you haven’t had a free report in the last year, the best place to get it is www.annualcreditreport.com. Be careful at this site. If you are requested to provide your credit or debit card, turn around and go back. You have made a wrong turn. Keep your cards in your wallet if you want a free report. 3-26-11


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