The quick answer is no — if you are married you may file bankruptcy individually and your spouse does not have to file. However, this doesn’t mean that this is the best road for you to take. If the court determines that filing individually was not done in good faith, it may dismiss the case; and if you don’t file properly, even the non-filing spouse may be stuck with debts he or she didn’t expect to have. Therefore, it’s important to select an attorney who is experienced in Ohio bankruptcy laws and can help you decide whether or not you should file jointly.
Ohio is a common-law state, not a community-property state. This means that when you file individually, only property held by you or jointly by both spouses can be sold to pay creditors.
Often, spouses who have property in his or her name only and want to keep those assets may prefer to have the other spouse file individually. However, the bankruptcy court will examine factors such as total household income and total household expenses to make sure that the filing spouse is the one who should actually be filing for bankruptcy. For example, your spouse might have run up bills remodeling the house, but since you are living in it as well, you are also responsible for any liens contractors may have put on it. With so much at stake, it may make sense to file jointly even if one spouse has run up most of the bills. Let’s take a closer look to see why.
WHY WOULD YOU FILE SEPARATELY?
Here are some reasons why spouses may decide to file independently:
- One spouse has already filed bankruptcy in the past 8 years.
- One spouse has all the debt and the other has none.
- One spouse owns assets free and clear and doesn’t want to lose them.
- One spouse has a clean credit record and doesn’t want that damaged and that spouse has not cosigned on the filing spouse’s debts.
WHY FILE JOINTLY?
However, there are benefits to filing a joint bankruptcy:
- If you have cosigned on a loan and the debt is in both your names, you will still owe the money despite your spouse’s bankruptcy.
- Bankruptcy law allows married couples filing jointly to each claim a full set of exemptions, unless otherwise noted.
- If you have a loan on a property such as a car or home you wish to keep, and you are current on the payments and the equity is covered by your exemptions, you may continue making payments on the loan and keep this property through the bankruptcy.
Remember, filing for bankruptcy protection can help you drastically reduce or eliminate the bills you cannot afford while keeping some assets, such as your car and your house, but it has to be done correctly. Bankruptcy issues are complicated, but the attorneys at Fesenmyer Cousino Weinzimmer understand the issues and the difficult decisions involved in taking this step. We will work with you to make sure you understand your options and help you decide on a solution that makes sense in your particular case.
Call Fesenmyer Cousino Weinzimmer at one of our office branches at 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati) for a free consultation so we can determine what debt relief solutions will work best for you.