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.