This topic almost found a place in last month’s top misconceptions blog. Many people think a married couple has to file together, and that is just not true. While it is true that combined income is a factor in determining you ability to repay debts, and thus qualify, or not qualify for bankruptcy, you do not have to file jointly.
Here is a great example:
A married couple had approximately $140,000 worth of credit card debt. Of that total, only $20,000 of it could be applied toward the husband as he was not on the joint account with the wife on any of the remaining debt. The couple also had some form of marital assets, such as stocks or savings, real estate etc. After looking at their total financial situation as well as their assets and debt situation, the best solution was for the wife to file individual chapter 13 filing. After all, it made sense to keep the husband’s credit solid and not drag him into the chapter 13 bankruptcy when he only had $20,000 worth of credit card debt. The couple can utilize some of their non-exempt assets to be applied towards the husband’s debt. This will lower the liquidation analysis and likely lower the percent which needs to be paid back to the unsecured creditors in the wife’s chapter 13 bankruptcy case. Curious what a liquidation analysis is? Check back soon for a blog on this topic.
If you are married and have questions like this, please do not hesitate to call my office.