It is always possible for one spouse to file for bankruptcy without the other, but it is not always wise to do so. Deciding which way to go depends on several factors which need to be carefully considered before you file.
Bankruptcy, a legal way to have many debts forgiven, can put you on the road to financial recovery, keep creditors from harassing you and seizing your possessions, allow debts to be forgiven, and provide a way for you to keep your assets and begin to rebuild your life. However, the bankruptcy process is complex, and deciding whether to file individually or jointly is just one of the many decisions you must make, so it pays to enlist the help of an experienced bankruptcy attorney to avoid making costly mistakes.
The skilled and compassionate Ohio bankruptcy attorneys at Fesenmyer Cousino Weinzimmer understand that financial problems can happen to even the most well-intentioned people. We offer a free consultation to evaluate your financial situation by looking at your income, your debts, your goals, and your marital situation, and coming up with a plan that’s best for you.
Call or contact us online today to set up your free consultation.
How Do You Decide?
Before making a decision, you should examine both of your debts to see which ones are causing the problem and whose name the debts are in. If the problem debts are in both names, both spouses own the debt jointly and are liable for payment of that debt. However, if the problem debts are in one spouse’s name, it may make sense for just that spouse to file.
Ohio is an “equitable distribution state,” so if you file for bankruptcy together, your separate debts, your spouse’s separate debts, and the jointly-held marital debts will be eliminated at discharge. If you file for bankruptcy by yourself, your separate debts and your share of the joint debts will be eliminated, but your spouse remains liable for his or her share plus his or her own separate debts.
As a result, if you have a lot of joint debt, it is usually better to file a joint bankruptcy. If there is little joint debt, but one spouse has a lot of individual debt, it is often better for that spouse to file alone.
For example, if most debt is credit card debt in the name of just one spouse, then only that spouse will need to file bankruptcy. But if both spouses signed the agreement or have cards in their names, both spouses must file bankruptcy to wipe out the debt or the credit card company can still sue the non-filing spouse who remains liable.
Advantages and Disadvantages of Filing Bankruptcy without a Spouse
In addition to the above considerations, there are some advantages and disadvantages to having just one spouse file alone. These include:
- Credit report – If one spouse has the debts and files for individual bankruptcy, it will not show on the other spouse’s credit report.
- Employer notification – If one spouse files alone, the other spouse’s employer should not have to find out about the bankruptcy.
- Exemptions – Under federal and Ohio law, people filing for bankruptcy have a list of exempt items they do not have to liquidate under a Chapter 7 bankruptcy or to have considered among the assets under a Chapter 13 bankruptcy. Exemptions you can keep include some personal property, your homestead, pensions, public benefits, wages, and tools of the trade.
- Means test — In Ohio, to qualify for Chapter 7 bankruptcy, you have to pass a means test which measures financial ability to pay creditors based on your disposable income, minus certain allowable expenses. If you file jointly, you must include your combined income in the bankruptcy, and this makes it harder to pass the means test. However, a joint bankruptcy may still be beneficial if both spouses have low or moderate income.
Filing jointly has the advantage of providing double exemptions, as each spouse is allowed to claim a full set. However, if one person has a significant amount of non-exempt separate property, then it may be best not to file jointly in order to protect those assets. If just one spouse files, the non-filing spouse’s separate property is not part of the bankruptcy.
Contact Us For Help
Determining whether it is better to file bankruptcy with or without your spouse is complicated, and mistakes can be costly. Each bankruptcy is unique, and it’s important to have an assessment of your situation by an experienced attorney in order to ensure the best path is followed.
The seasoned and compassionate Ohio debt relief attorneys at Fesenmyer Cousino Weinzimmer offer a free consultation to evaluate your entire financial picture to find the best fit for you and your spouse. We will make sure you are aware of all your options and help you decide on the path to a brighter future that makes sense in your individual case. We understand what you are going through and will walk you through the process.
Delaying can only worsen your situation, so contact us online or call the Ohio bankruptcy attorneys at Fesenmyer Cousino Weinzimmer today to set up your free consultation.