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Filing for Chapter 7 Jointly With Your Spouse

Filing for Chapter 7 Jointly With Your Spouse

If you’re a married couple struggling with debt, you aren’t alone. Sometimes, life events — illness, loss of a job — can compromise a couple’s financial well-being. These setbacks often force couples to make one of the hardest decisions; whether or not to file for bankruptcy. While there is more than one way to achieve debt relief, married couples may find Chapter 7 bankruptcy to be a viable solution.

While filing for Chapter 7 jointly can be a complicated process for those who don’t understand bankruptcy law, staying educated and understanding how the process works can help your case move along smoothly when working with a bankruptcy attorney. Here are some facts about bankruptcy every married couple should know.

How The Means Test Works When Filing Ch. 7 Jointly

The “means test’ is an evaluation of your current financial state and will determine if you have enough disposable income to repay your debts. Couples who want to file for Chapter 7 will need to disclose each spouse’s expenses — whether joint or not — and combined income. Filing for Chapter 7 jointly may offer married couples a double exemption benefit, but keep in mind there may be some restrictions that apply.

Here is how the means test is used to determine eligibility:

  • Median Income - If your current income is less than the median income in your state, then you and your spouse may be eligible to file for Chapter 7 bankruptcy.
  • Household Income - If your household income exceeds the state median, the means test will determine disposable income and if it is enough to pay off all or part of your unsecured debts.

Passing the means test does not necessarily indicate that Chapter 7 bankruptcy is the right choice for your current financial situation. Your attorney will assess your case to help you make the right decision.

Common Reasons Married Couples Consider Chapter 7

Filing for bankruptcy often comes with many negative stigmas which can deter married couples who need help from seeking out bankruptcy as a way to relieve debt. There are many reasons why married couples file Chapter 7 bankruptcy. Some of the most common are as follows:

  • Unexpected financial losses including losing a job, reduced income, medical bills
  • Unforeseen or increased expenses (home maintenance, repairs)
  • Not managing personal finances appropriately and overspending
  • Increase in cost of living

Can a Couple File for Chapter 7 if They are Legally Married But Not Living Together?

If you and your spouse are not living together, you can still file for joint Chapter 7 bankruptcy. However, if you are separated with the intent to divorce, there may be some particulars that could change the course of your case, should you divorce mid bankruptcy. In this instance, speaking to a bankruptcy attorney can help you and your spouse make an informed decision on how to proceed in relieving debt, and if filing Chapter 7 bankruptcy jointly is the right resolution.

If you and your spouse have been faced with mounting debt, Chapter 7 bankruptcy may be right for you. Our team of skilled attorneys will discuss your concerns and guide you through the bankruptcy process so you can make the right decision in resolving your debts. Contact Moore & Associates, LLC at (913) 225-8330 to learn more about your bankruptcy choices and our no cash upfront options.

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