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When you got married, it was for better or worse, richer or poorer – but being deep in debt falls somewhere in between. If what you owe has become burdensome, even if you are earning a decent wage, it can feel like you are poor and that things are destined to worsen. That can really put your vows to the test… But a Chapter 7 filing by a reputable North Carolina bankruptcy attorney can get you back on track – and it may be best to go it alone and not include your spouse.
Ultimately, you will want to rely on the advice of your bankruptcy attorney about whether to file as a couple or alone, but here are some factors to consider:
Is Your Marriage Intact?
If you and your spouse live together, you share a household and expenses, so their income and expenses will become part of your bankruptcy calculations that must meet the court’s approval. If you are separated and living apart (whether or not you’ve filed for divorce or legal separation) your spouse’s income and expenses will not be considered when you are filing bankruptcy. If you are living together, but your marriage is defunct and headed for splitsville, you may be able to convince the court you should be considered separately even though you are still co-habitating.
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Is Your Debt Joint or Individual?
If all of your debts are in your name alone, there’s no reason to drag your spouse into your Chapter 7 bankruptcy case. Or if you each have debts, but they are in your individual names, bankruptcy need not be a joint filing. Your attorney will no doubt ask about the debts you each hold and that you hold jointly before making a recommendation about joint or individual filing.
What Happens to Debt You and Your Spouse Have Together?
If you decide to file for individual bankruptcy and you have some debt that is shared, there will be consequences for your spouse. For jointly owned debt such as credit cards, if you file bankruptcy Chapter 13, creditors should accept negotiated payments. For Chapter 7 bankruptcy, you will be relieved of all obligation for the debt, but the creditor will continue to pursue your spouse for the entirety of the debt. If your debts are mostly joint debts, you will likely want to file together, otherwise your spouse will be left holding the bag.
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How Much Do You and Your Spouse Earn and Spend?
If you are living together (sharing a household), both your incomes will be considered in your bankruptcy filing. As well, your expenses will be reviewed. To determine if you are eligible to file bankruptcy – and whether you can opt for Chapter 7 or just Chapter 13 – disposable income must be calculated. They will add both of your incomes together and deduct eligible expenses for all obligations (both joint and separate.) If the court determines that together you have too much disposable income for a Chapter 7 filing, you may still be able to get Chapter 13 relief.
What Assets Do You and Your Spouse Own?
If your spouse owns significant property that you don’t want to have sold to satisfy some of your debts, it is best to file without them. For instance, if your spouse inherited property that’s owned free and clear or valuable antiques or jewelry, it will be up for grabs if you file joint, but will be protected from your filing. Only the income of your spouse - but not assets - is considered in the bankruptcy calculations. And if you have assets, don’t even think about transferring them to your spouse to avoid losing them in a bankruptcy filing. This can land you in hot water with the court! In a joint filing, all assets (regardless of who owns what) are considered far game if they exceed the amount of personal property exemptions allowed in North Carolina.
How Do You Know If Filing Alone Is the Best Option?
Reputable North Carolina bankruptcy lawyers are experts in both federal bankruptcy laws and local exemptions and thresholds that will apply to your case. Whether you need a Raleigh bankruptcy attorney, a Chapel Hill lawyer or an attorney in Greensboro NC, we can meet your needs. And one piece of good news is whether you file together or decide to go it alone, the attorney and court costs will be the same – they will not increase for the inclusion of a spouse. Deciding to file bankruptcy may feel like you're plummeting from a skyscraper to the street below, but in fact, a Chapter 7 can be an excellent safety net to restore your peace of mind.
Dedicated to helping residents of North Carolina find the best solutions to their debt problems. Don’t waste another day worrying about your debt. Call +1-919-646-2654 today to schedule a free initial consultation to discuss your bankruptcy options.