Sunday, November 28, 2010
Bankruptcy and the Non-Filing Spouse
There are many times when it makes sense for only one of two married people to file bankruptcy instead of filing jointly. Most of the time, the reason is that there is very little debt in the non-filing spouse's name or that the non-filing spouse has recently filed a bankruptcy petition and is time-barred from receiving another discharge at that time. Understandably, the non-filing spouse assumes that he or she will have no part of the bankruptcy process. However, this is not entirely true. The non-filing spouse must give pay stubs to the attorney of the filing spouse. And although it is unlikely, a non-filing spouse may sometimes have to appear at a court hearing to be questioned about his or her income and/or expenses.
I have heard the following question so many times, I thought I would take the opportunity to answer it on my blog:
"My spouse is filing bankruptcy, not me. Why do you need my pay stubs."
The bottom line is that if your spouse is filing bankruptcy and you are not you will still be somewhat involved. This is true because so long as you and your spouse live in the same household, the bankruptcy court will look at your total household income and expenses to determine whether your spouse should have money to pay to his or her creditors.
Bankruptcy attorneys will need the last 6 months of the non-filing spouse's pay stubs to determine what type of bankruptcy the filing spouse can file. Once it is time to file the bankruptcy petition, the attorney must file the pay stubs of the non-filing spouse for the 60-day period of time prior to the filing of the bankruptcy petition with the court. This does not mean that the non-filing spouse is filing bankruptcy. This does not mean that the non-filing spouse will be required to appear at the 341 hearing.
On rare occasions, such as if the united states trustee files a motion to dismiss, the attorney for the debtor spouse may ask the non-filing spouse to come to testify about his or her income or expenses. If this were to happen it is very likely that the attorney would speak with the non-filing spouse about what to expect, what questions would likely be asked and how to properly answer the questions.
If you spouse files bankruptcy you have not filed bankruptcy just by virtue of being married. However, if your spouse files for bankruptcy and does not pay on a joint debt the creditor will eventually be able to try to come after you. However, if you have a joint debt, such as a car loan that your spouse is reaffirming and will continue to make payments on life will continue normally as to that creditor. Check your credit report after your spouse has filed bankruptcy and be prepared to contest any inaccurate information with the three credit reporting agencies.
The moral of this entry is that even if you are not filing bankruptcy it is, in my opinion, still important for you to understand your spouse's bankruptcy, and to understand that your spouse's bankruptcy can affect you. If you need a bankruptcy attorney or are considering whether it makes sense to file bankruptcy I can help. For a free consultation with me at my law firm, Halcomb Singler in Carmel, Indiana, click here.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
Saturday, November 6, 2010
Cost-Cutting to Avoid or Recover from Bankruptcy
I just watched the series premier of "Downsized" on WE. As a bankruptcy attorney, I found this show very interesting. As the name implies, it is about a family coping after having filed bankruptcy. Prior to bankruptcy, the husband owned a construction company and earned a very comfortable living. The family was able to live well and didn't really think about money.
As a bankruptcy attorney I found this show very intriguing. I meet with many clients who are struggling just to pay their minimal living expenses on a day to day basis. I am always looking for ways to identify with them and hope to be able to provide them with suggestions on how to streamline their finances. Overall, I try to give my clients hope that even though they are facing an extremely difficult time in their lives, that this time will make them stronger and that they can and will get through it.
One thing the show focused on was the way that the teenage children were dealing with the family struggling to make ends meet. While the teens were frustrated with the situation, 3 of them went dumpster diving to look for cans and other goods to recycle and came up with about $20.00 to go towards the family's rent. Then, one of the teens sold his baseball glove for $100.00 which made the family's rent for that month.
"Downsized" reminded me it is not and probably will never be easy to deal with a lack of income. In our present economy many professional, educated and hard-working people are finding themselves in extreme financial hardship. These are people who have never found themselves wanting for anything. They are the true middle class.....and just as the family in "Downsized" discussed; major lifestyle changes need to be made when there is a significant decrease in income.
A few of the suggestions that I often make to clients looking to decrease expenses are as follows:
1. Cancel Cable and Internet.
Again....I will stress that none of these suggestions are fun. Any person can find a reason to talk themselves out of canceling cable or Internet service. I have heard many excuses including my personal favorite that "my kid needs it for school." I suggest speaking to the teacher or school and explaining that Internet isn't in the budget. If the school can't give homework assignments, post grades, etc., on paper then just go to the library.
2. Cut out the gym membership.
I am guessing you have tennis shoes. Go outside and run for free.
3. Cut Coupons and Shop Sales on Groceries
I am constantly amazed about how many people tell me that they go to the grocery store and spend money without any limits. Groceries are an expenses that you can control much more easily than a gas or electric bill. Take advantage of this by cutting coupons and only buying what is on sale. Plan your meals around the sale items you purchase.
4. Don't Ever Eat Out...this includes lunch
Seriously. NEVER. It can be done. I recall a number of years when my family did not eat out when I was a child. If you are having trouble making your rent or mortgage payment you just cannot afford to eat out. End of story.
5. Go to Cash
Stop using the debit card as your primary means to make purchases. Go to cash instead. Use your budget to lay out how much cash you get each month for food, clothing, gas, and other variable living expenses. When the cash is done you are done spending until next month. When you can see how much money there is and can physically see the cash you are spending you will spend less. It is amazing how that coffee at a fast food restaurant or soda at the gas station add up. You may think I am overreacting with this one, but I look at people's bank statements all the time and it amazes me how fast the little things add up.
6. Cut out the dance classes, soccer leagues, or any other unnecessary classes or activities.
These are not needs. They are wants. Being able to pay rent or mortgage is more important than fun.
7. No Vacations
I don't care if it is a weekend 2 hours away. I don't care how much you think you "deserve" it. If you are really struggling just push the idea of a vacation out of your mind. You can do it. I know plenty of people who haven't been on a vacation in 10 years. Again, this is not fun...this is the manual for those who are just trying to make ends meet.
8. Do not worry about the Jones
Because more and more people struggling financially were traditionally middle-class, they feel the need to maintain a certain standard for their social circle. This pride can cost them. Let your friends in on the fact that you are struggling and if they are really your friends they will understand. This will also make it less likely that they will put you in uncomfortable situations such as inviting you to an expensive dinner or on a weekend trip. It will also make you feel better because when you are around them you will not feel the need to put on a persona that everything is great with your finances.
9. Remember what you do have
If you, your spouse and your children are healthy you have everything. Many wealthy people are sitting in hospitals with sick children right now and wish that they could buy their children better. They cannot. If you have the love of your family and your family is blessed with health then your finances are not the biggest problem you could be facing. When you feel hopeless remember that you always have something to be thankful for and that it could always be worse.
10. Make it fun to stop spending
Believe it or not it can be fun to watch your money. It is rewarding to live within your means. It is fun to see that you saved $15.00 at the grocery store or that you were able to use banking points to buy a gift card to give as a gift. You feel good when you find $25.00 in change around the house. Focus on the positive in what you are doing with your limited resources.
This is in no way an exhaustive list. There are no limits on what you or your family can do to make ends meet in a sticky financial situation. While many families are going through extremely difficult financial situations right now, it is important to remember that you cannot move forward if you are without hope. While it can often seem like a hopeless situation, it can also bring families together and help shape children into strong adults.
Please post any additional tips you have for cost-cutting in the comments section. As always, if you live in central Indiana and feel you may need to file bankruptcy you can meet with me at Halcomb Singler LLP, in Carmel, Indiana. Please contact our office at 317-575-8222 or just click here for an appointment.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
As a bankruptcy attorney I found this show very intriguing. I meet with many clients who are struggling just to pay their minimal living expenses on a day to day basis. I am always looking for ways to identify with them and hope to be able to provide them with suggestions on how to streamline their finances. Overall, I try to give my clients hope that even though they are facing an extremely difficult time in their lives, that this time will make them stronger and that they can and will get through it.
One thing the show focused on was the way that the teenage children were dealing with the family struggling to make ends meet. While the teens were frustrated with the situation, 3 of them went dumpster diving to look for cans and other goods to recycle and came up with about $20.00 to go towards the family's rent. Then, one of the teens sold his baseball glove for $100.00 which made the family's rent for that month.
"Downsized" reminded me it is not and probably will never be easy to deal with a lack of income. In our present economy many professional, educated and hard-working people are finding themselves in extreme financial hardship. These are people who have never found themselves wanting for anything. They are the true middle class.....and just as the family in "Downsized" discussed; major lifestyle changes need to be made when there is a significant decrease in income.
A few of the suggestions that I often make to clients looking to decrease expenses are as follows:
1. Cancel Cable and Internet.
Again....I will stress that none of these suggestions are fun. Any person can find a reason to talk themselves out of canceling cable or Internet service. I have heard many excuses including my personal favorite that "my kid needs it for school." I suggest speaking to the teacher or school and explaining that Internet isn't in the budget. If the school can't give homework assignments, post grades, etc., on paper then just go to the library.
2. Cut out the gym membership.
I am guessing you have tennis shoes. Go outside and run for free.
3. Cut Coupons and Shop Sales on Groceries
I am constantly amazed about how many people tell me that they go to the grocery store and spend money without any limits. Groceries are an expenses that you can control much more easily than a gas or electric bill. Take advantage of this by cutting coupons and only buying what is on sale. Plan your meals around the sale items you purchase.
4. Don't Ever Eat Out...this includes lunch
Seriously. NEVER. It can be done. I recall a number of years when my family did not eat out when I was a child. If you are having trouble making your rent or mortgage payment you just cannot afford to eat out. End of story.
5. Go to Cash
Stop using the debit card as your primary means to make purchases. Go to cash instead. Use your budget to lay out how much cash you get each month for food, clothing, gas, and other variable living expenses. When the cash is done you are done spending until next month. When you can see how much money there is and can physically see the cash you are spending you will spend less. It is amazing how that coffee at a fast food restaurant or soda at the gas station add up. You may think I am overreacting with this one, but I look at people's bank statements all the time and it amazes me how fast the little things add up.
6. Cut out the dance classes, soccer leagues, or any other unnecessary classes or activities.
These are not needs. They are wants. Being able to pay rent or mortgage is more important than fun.
7. No Vacations
I don't care if it is a weekend 2 hours away. I don't care how much you think you "deserve" it. If you are really struggling just push the idea of a vacation out of your mind. You can do it. I know plenty of people who haven't been on a vacation in 10 years. Again, this is not fun...this is the manual for those who are just trying to make ends meet.
8. Do not worry about the Jones
Because more and more people struggling financially were traditionally middle-class, they feel the need to maintain a certain standard for their social circle. This pride can cost them. Let your friends in on the fact that you are struggling and if they are really your friends they will understand. This will also make it less likely that they will put you in uncomfortable situations such as inviting you to an expensive dinner or on a weekend trip. It will also make you feel better because when you are around them you will not feel the need to put on a persona that everything is great with your finances.
9. Remember what you do have
If you, your spouse and your children are healthy you have everything. Many wealthy people are sitting in hospitals with sick children right now and wish that they could buy their children better. They cannot. If you have the love of your family and your family is blessed with health then your finances are not the biggest problem you could be facing. When you feel hopeless remember that you always have something to be thankful for and that it could always be worse.
10. Make it fun to stop spending
Believe it or not it can be fun to watch your money. It is rewarding to live within your means. It is fun to see that you saved $15.00 at the grocery store or that you were able to use banking points to buy a gift card to give as a gift. You feel good when you find $25.00 in change around the house. Focus on the positive in what you are doing with your limited resources.
This is in no way an exhaustive list. There are no limits on what you or your family can do to make ends meet in a sticky financial situation. While many families are going through extremely difficult financial situations right now, it is important to remember that you cannot move forward if you are without hope. While it can often seem like a hopeless situation, it can also bring families together and help shape children into strong adults.
Please post any additional tips you have for cost-cutting in the comments section. As always, if you live in central Indiana and feel you may need to file bankruptcy you can meet with me at Halcomb Singler LLP, in Carmel, Indiana. Please contact our office at 317-575-8222 or just click here for an appointment.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
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