Filing Bankruptcy Without Your Spouse
Considering filing bankruptcy without your spouse? You should discuss your situation with a bankruptcy lawyer before doing so. This article is meant to answer questions and concerns if you’re considering filing bankruptcy without your spouse.
What Debts Are Included If I File Bankruptcy Without My Spouse?
If you file bankruptcy without your spouse, any debt in your name will be included in the bankruptcy. This includes joint debt that you may have with your spouse. There are a few things to keep in mind, though. First, if you and your spouse have joint debt, you are both responsible for 100% of the debt. Second, a bankruptcy filing will only address your obligation under the debt. Lastly, while the Automatic Stay in bankruptcy may delay creditors from pursuing your spouse as a joint debtor, they eventually will pursue her for the debt. Furthermore, your discharge in bankruptcy will discharge your obligation under the debt, but leave hers intact.
Jointly Owned Vehicles In Bankruptcy
If you have a vehicle which is titled in both your name and your spouse’s name, filing bankruptcy without your spouse is still ok. When you file the bankruptcy, you will declare your 50% ownership of the vehicle. You will also need to use N.C.G.S. Sec. 1C-1601(a)(3) to exempt your portion of equity in any vehicle you own all or part of.
Primary Residence In Bankruptcy
If you and your spouse own your primary residence together and you’re filing bankruptcy without your spouse, you can claim a 100% exemption as Tenancy By The Entirety under 11 USC Sec. 522(b)(3)(B). Keep in mind that you must have created a tenancy by the entirety upon purchase of the real property. Your bankruptcy attorney will want to see a copy of your deed to confirm this. Lastly, this exemption protects your equity in the home against creditors in your name only. If you have joint debt, those joint creditors may be able to access the equity in your home to the extent it exceeds your allowable Homestead Exemption under N.C.G.S. Sec. 1C-1601(a)(1).
The Means Test When You File Bankruptcy Without Your Spouse
If you’re filing bankruptcy without your spouse, the Means Test calculations will differ slightly. First, your attorney should prepare a bankrutpcy petition considering your entire household income. When the petition is prepared this way, you can also deduct your entire household expenses. To the extent your spouse has income she does not contribute to the household, those funds can be subtracted out as a Marital Adjustment in the Means Test calculations—this may help you pass the Means Test in a Chapter 7 filing.
Speak With A Bankruptcy Attorney Today
If you’d like to speak with a bankruptcy attorney about filing bankruptcy without your spouse, we’re here to help. The call is free. You can reach us at 704.749.7747 or click for a FREE CASE EVALUATION and we will be in touch shortly.