FOR married couples who are contemplating bankruptcy, one of the primary concerns they have is whether or not they can file singly. Stated otherwise, if you are married, can you file Chapter 7 or Chapter 13 bankruptcy without your spouse?
Yes, you can. Actually, you have three (3) options as to your status when filing bankruptcy, namely, 1) married, not filing jointly, with declaration of separate households; 2) married, not filing jointly, without declaration of separate households; and 3) married, filing jointly. The first option usually refers to couples who are separated, have filed for divorce or planning to file a divorce.
Sometimes it makes more sense for married couples to file jointly. The bankruptcy filing fee is the same whether it is filed as a joint petition or not. Preparing just a single bankruptcy petition for both spouses is more convenient. However, the decision as to whether you should file alone or with your spouse would depend on the particular circumstances of each case.
Even if a married couple decides that only one of them should file, the income of the non-filing spouse will still be considered. To determine if one is qualified to file a Chapter 7 liquidation bankruptcy, the married couple’s combined income or your household income (if there are other household members who contribute regularly to the household income) will be considered. If a Chapter 13 bankruptcy petition is filed, the combined income of the married couple (or household income for that matter) is used to determine how much is the monthly disposable income (MDI), i.e., the amount you have to pay monthly under your Chapter 13 Plan. However (and for fairness’ sake), your entire household expenses will also be considered as a deduction in computing your MDI.
California is a community property state. Property acquired during the marriage is considered community property except gifts and inheritances. In bankruptcy, community property is considered part of the bankruptcy estate. If you file singly, you need to include in your bankruptcy petition all of the community property and your separate property. The non-filing spouse’s separate property need not be included.
However, and this is big however, if the assets in the community property and your separate property are exempt under applicable bankruptcy laws, then the trustee cannot take these assets away from you.
The discharge in bankruptcy affects only the personal liability of the filing spouse. Thus, if only one spouse gets a discharge under bankruptcy, the creditor can collect from the non-filing spouse if he is personally liable of the debt. If so, the creditor can collect only from the separate property of the non-filing spouse. The creditor however cannot collect from the community property acquired after the filing of the bankruptcy.
If you are contemplating of filing bankruptcy or other alternatives, it is advisable to seek the counsel of a bankruptcy lawyer to guide you on the intricacies of filing for such a petition.
Atty. Gwendolyn Malaya-Santos is a member of the State Bar of California and the Integrated Bar of the Philippines. To schedule for a free initial in-person consultation, please call Tel. Nos. (213) 284-5984 or (626) 329-8215. Atty. Santos’ office is located at 3450 Wilshire Blvd., Suite 1200-105, Los Angeles, CA 90010.
Information contained in this article does not, nor is it intended to, constitutes legal advice for any specific situation and does not create a lawyer-client relationship. It likewise does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
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Atty. Gwendolyn Malaya-Santos is a member of the State Bar of California and the Integrated Bar of the Philippines. To schedule for a free initial in-person consultation, please call Tel. Nos. (213) 284-5984 or (626) 329-8215. Atty. Santos’ office is located at 3450 Wilshire Blvd., Suite 1200-105, Los Angeles, CA 90010.
* * *
Information contained in this article does not, nor is it intended to, constitutes legal advice for any specific situation and does not create a lawyer-client relationship. It likewise does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
