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Should I File for Chapter 13 Without My Spouse?

Should I File for Chapter 13 Without My Spouse?

Should I File for Bankruptcy with My Spouse or Separately?

You can file for Chapter 13 Bankruptcy with or without your spouse. If you are filing individually but share the same household you will need to provide income documents for your spouse, if you maintain a separate household you may not have to. Couples who are struggling with debt have many questions about bankruptcy and how it will affect the other spouse. Here’s what you need to know.

Can Creditors Still Pursue My Spouse to Collect the Debt?

In some cases, yes. Filing for an individual bankruptcy only shields you from your creditors. Your spouse still must repay his or her personal debt. Also, creditors can go after your spouse for your joint debts. However, when filing forĀ Chapter 13 bankruptcy, your spouse may be protected through a provision called the “codebtor stay.” The codebtor stays automatically protects any codebtors from creditors during the bankruptcy process. This is not an option when filing for Chapter 7 bankruptcy.

Common Reasons Married Couples Do Not File Jointly

Every married couple’s financial situation is unique and filing jointly doesn’t always make sense. Here are some common reasons why married couples do not file for bankruptcy together:

  • To protect the non-filing spouse's credit.
  • You and your spouse have very little or no joint debt.
  • The non-filing spouse has a substantial amount of property that would not be exempt through bankruptcy.
  • The spouse's personal debts are small or non-existent.
  • Your spouse does not want to file bankruptcy.
  • Your spouse isn't eligible to file for a Chapter 13 bankruptcy because your spouse's debts from a previous Chapter 13 case have yet to be discharged.

Bankruptcy is not one-size-fits-all, and the above reasonsĀ may not apply to your situation. Having an experienced bankruptcy attorney on your side can help you make the right bankruptcy choice that best fits your financial situation.

What is the Marital Adjustment Deduction?

A married person who files for individual bankruptcy is required to include the non-filing spouse's income if the couple shares the same household. For a Chapter 13 bankruptcy, your joint income depends on how much-unsecured debt you have to repay. The marital adjustment deduction lowers the amount of income to be considered in your bankruptcy case. The non-filing spouse's expenses that are not shared household expenses will count toward the marital adjustment deduction.

Expenses that often qualify for the marital adjustment deduction are:

  • Payments on personal debts such as student loans or 401(K) loans
  • Alimony
  • Child support
  • Car payments for the non-filing spouse's vehicle
  • Payroll deductions
  • Mortgage payments for the non-filing spouse's property

We understand the financial circumstances that have led you to consider filing for Chapter 13. Our experienced bankruptcy attorneys can help you make the right bankruptcy choice that suits your financial needs and goals. Contact Moore & Associates, LLC at (913) 225-8330 to schedule an appointment and to learn more about our no cash upfront options.


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