If you’re married and considering bankruptcy, you have some decisions ahead of you. You’ll need to decide which chapter to file and if you’ll file together or just one of you will file. [LINK married filing separately] I can help you make the decisions that will give you the best possible outcome. If you decide that just one of you will file a Chapter 7, we’ll need to conduct the Means Test first to see if you qualify. If you’re married and living together, both of your income and property is included in the Means Test calculation. If the spouse who is not filing has considerable income, which could cause you to fail the Means Test, you may still be able to file a Chapter 7 by using the marital adjustment deduction.
Choosing Exemptions
We’ll take advantage of all of the available exemptions to preserve your property and set you up for a successful financial future. Additionally, the marital adjustment deduction allows you to deduct some of your spouse’s income that goes toward covering his or her individual expenses when you are filing separately. The Means Test will use your standard deductions that you share, such as your mortgage and utilities, and the marital deduction to determine if you qualify for a Chapter 7. Allowed expenses vary from state to state and court to court, and we’ll work through these guidelines together. In general, you may be able to deduct your non-filing spouse’s:
- Alimony and child support for your spouse’s children who do not live with you
- Student loans
- Mortgage payments on property owned only by your spouse
- Car payments and insurance
- Credit card payments that are only in their name
- Cell phone and business travel
- Payroll deductions (insurance, taxes, retirement, union dues)
- Entertainment
- Gym membership
Working With the Court
It’s important to take advantage of these deductions carefully and to not claim the same expense twice, as part of your standard deductions and marital adjustment deduction. The trustee will be looking closely at this, so you’ll need to provide written documentation showing how your expenses are shared or separated. Without proper evidence, some of your exemptions could be disallowed. This could make you ineligible for a Chapter 7, and your case could be dismissed. The trustee will do some research, and if it’s determined that you purposefully provided incomplete or inaccurate information, you could be charged with bankruptcy fraud, which is a serious crime.
Moving On
Filing bankruptcy can be hard on a marriage, so it’s a good idea to work with a professional attorney who can offer assistance and guidance through the process. I’ll use my years of experience to help your case go smoothly and to point you in the right direction as you begin rebuilding your credit. With your debt behind you, you’ll be able to focus on working hard and building your relationship.