Miami, Florida Bankruptcy Lawyers
When one spouse has incurred a great deal of debt in his or her name only, he or she can file for bankruptcy without requiring their spouse to do so as well. However, in filing for bankruptcy, salary and other asset information of the non-filing spouse is required, in order to determine if the filing spouse qualifies for Chapter 7 or Chapter 13.
Additionally, while a non-filing spouse is not liable for a filing spouse's debt, if joint property is owned between them their estate may be not be immune to actions on the part of creditors. At Kingcade & Garcia, Attorneys at Law, our attorneys work with individuals and couples in cases involving filing for bankruptcy by just one spouse.
While couples are often tempted to borrow money, take out a second mortgage, or consolidate credit cards, doing so may actually be more expensive and counterproductive in the long run. Our lawyers understand the financial issues facing couples when only one spouse needs to file for bankruptcy. We can advise you in how to help protect your credit and the steps you need to take to begin rebuilding your credit score.
If you or your spouse needs to file for bankruptcy, contact Kingcade & Garcia today to schedule an appointment to discuss your case. We can order a credit report, evaluate your financial situation, and determine the best course of action available to you.
When only One Spouse needs to file for Chapter 7
While only one spouse may be filing for bankruptcy, the court will consider household income in order to determine if the filing spouse is eligible to file for Chapter 7. In cases where a filing spouse has little disposable income but a non-filing spouse earns substantially more, the income of both will be reported on bankruptcy forms. If the household income is more than the qualifying median income required for filing Chapter 7, the filing spouse may have to file under Chapter 13. In either case, the court will consider what your current monthly income (CMI) is by deducting expenses your spouse pays that are not related to monthly household costs. After determining your CMI, the court will then determine you disposable income.
For example, if your spouse pays $500 on a car loan, $500 will be deducted from your total costs in order to determine your monthly disposable income.
When One Spouse must file under Chapter 13
If the household income of a filing spouse disqualifies him or her for Chapter 7, he or she can still file under Chapter 13. Under Chapter 13, a trustee is appointed by the court in order to administer the repayment of debt according to a plan agreed to by the filing spouse's creditors. While the non-filing spouse will not be involved in the Chapter 13 repayment plan, his or her income will be considered when determining the repayment schedule.
Credit Reports and Non-Filing Spouses
In theory, any debt carried by one spouse that is his or hers alone, will not appear on the other spouse's credit report. Additionally, bankruptcy on the part of one spouse should not appear on the credit report of a non-filing spouse unless they have joint debt together.
If you need additional information regarding bankruptcy and single filing by one spouse only, contact bankruptcy attorneys at Kingcade & Garcia today to schedule an appointment to discuss your case.