When one spouse has incurred debt in his or her name only, he or she can file for bankruptcy without requiring their spouse to do so as well. However, in filing for bankruptcy, salary and other asset information of the non-filing spouse is required to be disclosed, in order to determine if the filing spouse qualifies for Chapter 7 or Chapter 13. Additionally, while a non-filing spouse is not liable for a filing spouse’s debt, if joint property is owned between them, the property may be not be immune to actions on the part of creditors.
When only one spouse should to file for Chapter 7 Bankruptcy While only one spouse may be filing for bankruptcy, the court will consider household income in order to determine if the filing spouse is eligible to file for Chapter 7. In cases where a filing spouse has little disposable income but a non-filing spouse earns substantially more, the income of both will be reported on bankruptcy forms. If the household income is more than the qualifying median income required for filing Chapter 7, the filing spouse may have to file under Chapter 13. In either case, the court will consider what your current monthly income is by deducting expenses your spouse pays that are not related to monthly household costs. After determining your current monthly income, the court will then determine you disposable income. More information available at www.utahchapter7.com
When one spouse should file under Chapter 13 Bankruptcy If the household income of a filing spouse disqualifies him or her for Chapter 7, he or she may still be able to file under Chapter 13. Under Chapter 13, a trustee is appointed by the court in order to administer the repayment of debt according to a plan agreed to by the filing spouse’s creditors. While the non-filing spouse will not be involved in the Chapter 13 repayment plan, his or her income will be considered when determining the repayment schedule. More information available at www.utahchapter13.com