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Marriage is a blessing, but it always comes with challenges. Money can be a touchy subject if you don’t see eye to eye about saving and spending, and if you’re in debt, things can get pretty stressful. If your debt has grown to the point where you’ve decided to file bankruptcy, you’ll need to work together as a team to make a new start. While most couples decide to file together, if the partners have significantly different incomes or debts, it may be best for just one person to file a Chapter 7. How you decide to file will determine which of your income and property will be included in the Means Test. In order to give you the best financial outcome and protect your assets, we’ll use the marital adjustment deduction.
The Basics
Filing bankruptcy isn’t just about discharging your debts; it’s also important to do everything possible to protect the property and assets you’ve worked so hard to acquire. When only one spouse files bankruptcy, we can deduct some of the non-filing spouse’s income that is used to cover his or her individual expenses. We can deduct their cell phone, club memberships, business expenses, and entertainment. Additionally, any debts that are in their name alone will not be included in your case. This could be student loans, credit cards, car loans, insurance, or a mortgage that is solely in their name. Child support for their own children who do not live with you, as well as alimony they pay, will not be included in your case.You can also split up expenses that you share, such as utilities or a joint mortgage, and deduct their portion. The goal of all of this is to lower the total income that we use for the Means Test, which could mean the difference between a Chapter 7 or Chapter 13.
Squared Away Paperwork
As you utilize the standard and marital adjustment deductions, you will provide documentation to the court so that they can easily review your case. Documents should be organized and clear, showing who is responsible for which debts and expenses, giving the court no reason to disallow any of our desired exemptions. There will be no cause for concerns that your case will be dismissed or the trustee would even suspect Bankruptcy Fraud.
Finding an attorney who can help file all the paper work and know your case will take some of the stress out of filing and hopefully bring some joy back to your marriage.
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Source by W. George Senft