Can I File Again for Bankruptcy if My Husband Passes Away
In a Nutshell
Y'all can file for Chapter 13 bankruptcy without your spouse. A Chapter 13 bankruptcy works a trivial differently if only one spouse files. How certain debts and assets are treated is affected by whether the couple lives in a community property state or a common law land. Whether you lot're best served by filing without your spouse or past the 2 of y'all filing a articulation bankruptcy depends on the specifics of your situation. There are many valid reasons for which a person may want to or need to file for bankruptcy protection without their spouse. Read on to larn about filing Chapter xiii without your spouse.
You tin file for Chapter 13 bankruptcy without your spouse. A Chapter thirteen bankruptcy works a little differently if just one spouse files. How certain debts and avails are treated is affected by whether the couple lives in a community property state or a common law state. Whether yous're best served past filing without your spouse or past the two of you filing a joint defalcation depends on the specifics of your situation. There are many valid reasons for which a person may want to or demand to file for bankruptcy protection without their spouse. Read on to learn about filing Chapter xiii without your spouse.
The Basics of Affiliate thirteen bankruptcy
Chapter 13 bankruptcy functions as a reorganization of debts and requires a 3 to v year repayment plan. The filer must transport the monthly plan payment to the bankruptcy trustee, who will so pay allowed creditor claims according to the Chapter 13 plan.
To file Chapter 13 bankruptcy you must have regular income that's high enough to encompass your monthly living expenses and your monthly plan payment. Mortgage arrears, missed car payments, not-dischargeable tax debts, and back spousal or kid support payments can be paid off in the plan. It'south possible to pay off debts secured by personal property in the plan, as well, such as paying off a car loan. All or a portion of your unsecured debts, including credit card debt, will be paid by your Affiliate 13 plan. After all program payments are fabricated, the defalcation courtroom will issue a discharge order erasing any remaining dischargeable debt.
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How Chapter 13 works if merely ane spouse files
The non-filing spouse's proper name and social security number will not appear in the filing spouse'due south bankruptcy petition. The non-filing spouse's income must be disclosed in the bankruptcy petition and will be considered when determining Affiliate 7 defalcation eligibility and included in the means examination calculation. The means exam determines whether an private qualifies for Affiliate 7 bankruptcy. If a Chapter xiii is filed, considering of Affiliate 7 ineligibility or for benefits simply bachelor in Affiliate 13, the ways exam determines whether the repayment plan will last for 3 or 5 years. Both the means test and Schedule I (income) let for the marital aligning deduction for expenses (including debt payments) the non-filing spouse has that don't benefit the filer's household.
The Automated Stay
The automated stay protects filers from creditor drove deportment while their instance is pending. The co-debtor stay protects the non-filing spouse from collections, even if they are jointly liable on the debt. This means that creditors cannot endeavor to collect from the not-filing spouse on joint debts. Since payments distributed to creditors by the bankruptcy trustee are not based on the banking concern'southward due dates, the non-filing spouse'south credit will take a hit for joint accounts where the non-filing spouse is a co-debtor. Negative reporting volition appear on their credit report and their credit score may decrease even if the joint debt, such equally a auto loan, is paid off through the Chapter 13 plan.
The community discharge protects the not-filing spouse'south community property from collection once discharge is entered. This applies to joint debts even though only one spouse filed for bankruptcy and received a discharge. Protected community property includes wages, bank accounts, and other personal property. The community discharge doesn't preclude a creditor from collecting the debt from the non-filing spouse's dissever holding, but in exercise, this isn't likely. The creditor would accept to expend resources figuring out which, if whatever, assets are separate property of the non-filing spouse that didn't receive the bankruptcy discharge.
Taxation Refunds
Generally, tax refunds received during your Affiliate xiii plan must be handed over to the trustee. This is because all of your disposable income is supposed to get into the programme for the benefit of your creditors. However, joint revenue enhancement refunds in individual bankruptcy cases are treated differently. The non-filing spouse's share of the taxation refund doesn't have to be turned over to the trustee as long as yous're not in a community property state. Their share is calculated either as a l/l split between the spouses, as a proportionate split based on withholdings during the relevant tax catamenia, or an allocation based on what each spouse's taxation obligations would have been if the spouses had filed split tax returns. (Run into In re Lester L. Lee (2014)). In community belongings states, the total tax refund is part of the bankruptcy estate, even if only one spouse files for defalcation.
Reasons you may want to file without your spouse
At that place are a multifariousness of reasons why someone may wish to file Chapter 13 bankruptcy without their spouse. Let'south take a look at some of the virtually common ones.
You may want to file bankruptcy without your spouse if you lot recently got married and all of your debt is separate, premarital debt that your spouse isn't liable to pay or y'all 2 have a prenuptial agreement in place and your spouse is not liable on any of your debts. In a community property land, secured and unsecured debts incurred during the union by one spouse are considered community debts. This is truthful even if the other spouse was not a co-signer and didn't otherwise approve the debt. Community avails can be held liable for repaying the debts taken out past one spouse. When one spouse receives a discharge of debts in an private bankruptcy case, the community discharge extends to and protects the non-filing spouse's community holding from collection.
You may need to file Affiliate thirteen bankruptcy without your spouse if they are ineligible for Chapter 13 considering their high debts, such every bit pupil loans, push them over the debt limits for Chapter xiii. Even if your spouse'southward pupil loan debts are inside the debt limits, if those obligations are high it makes more sense for you lot to file defalcation individually so that your spouse can keep making payments on their pupil loans directly.
You lot'll want to consider filing for Chapter thirteen bankruptcy individually if your spouse has high domestic back up obligations that are past due and would render the plan not feasible. All past due domestic support obligations have to be paid in full through the program, which tin can be impossible if the arrearage is besides high. Finally, if your spouse had a prior bankruptcy and is not eligible for a discharge at this fourth dimension, you may want to file bankruptcy without your spouse.
Other
You may wish to file Affiliate 13 bankruptcy without your spouse if your spouse is a casher in a will and the relative may pass abroad in the side by side 5 years. Or, if your spouse works in a profession that requires security clearance or imposes other restrictions on their power to file bankruptcy, then yous may desire to file individually.
One other reason why y'all may wish to file Chapter 13 bankruptcy without your spouse is to protect the spouse's nonexempt assets, which are assets that can't be protected through bankruptcy. Protecting a spouse's separate, nonexempt holding only works if you lot're in a community property state and tin demonstrate the assets are truly the separate property of the non-filing spouse.
Determination
Filing bankruptcy without your spouse is possible. The income of the non-filing spouse must be disclosed in the bankruptcy petition but their name and social security number volition be left out. Your family's reasons for wanting but one spouse to file for Chapter thirteen bankruptcy protection could be compelling. Whether you lot're better off filing without your spouse or filing a joint petition depends on your specific situation and it isn't a bad idea to go a gratuitous consultation to discuss all of this with a bankruptcy lawyer. This is especially true if you think you lot may end upward in a divorce while your Affiliate xiii case is pending.
Affiliate 13 bankruptcy is very different from Affiliate 7. Chapter thirteen cases are more complex, final a lot longer, and have more requirements and potential pitfalls. Most people exploring Chapter xiii should speak to a bankruptcy chaser – the failure charge per unit of pro se filers (people who file without an attorney) Chapter xiii cases is very high.
Upsolve's free spider web app enables filers to prepare their Chapter seven bankruptcy forms. If you don't qualify for Affiliate 7, you tin typically locate a bankruptcy attorney in your area that provides free bankruptcy consultations so that you can learn more near your debt relief options.
Source: https://upsolve.org/learn/chapter-13-without-spouse/
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