One Spouse File for Bankruptcy?
Yes. One spouse can file for bankruptcy and the other spouse do not have to file.
When doing intakes with potential clients, I get asked a lot: “Does my spouse have to know?”
Unfortunately, when filing for bankruptcy, whether it is Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, the non-filing spouse must cooperate with the bankruptcy filing. For example, I might need the non-filing spouse to sign a Spousal Waiver so that you can use the CCP 703 exemption to take advantage of the “wildcard exemption” to protect all your assets like tax refunds, cars with too much equity, etc. The CCP 703 exemption assumes that you do not own a home with significant equity. Moreover, I need the non-filing spouse’s 6 months of paystubs to fill out the Means Test. I will also need to list and provide information about all community properties, which may includes the non-filing spouse bank statements, pensions, etc.
One advantage for one spouse filing bankruptcy is that the community property is protected from creditors even if only one spouse files for bankruptcy. If one spouse file alone, then the other spouse can file bankruptcy later on later debts that was not discharged in the earlier bankruptcy case. From the previous Sacramento Stockton Fairfield CA Bankruptcy Attorney Blog, you have to wait a period of time before you can get another discharge from filing multiple bankruptcy cases.
Advantages in Chapter 13 Bankruptcy for One Spouse Filing
Another advantage I sometime take advantage of is in a Chapter 13 Bankruptcy case where there is a debt ceiling to qualify. So to preserve the right to file a Chapter 13 Bankruptcy, one spouse would file because if both spouses were to file, then their combine debts will exceed the Chapter 13 Bankruptcy debt ceiling and therefore they no longer qualify for Chapter 13 Bankruptcy.
Moreover, an advantage for one spouse filing a Chapter 13 Bankruptcy case is if the spouses are estranged or separated and the filing spouse’s income is so high that the Chapter 13 Bankruptcy case will be a 100% plan payment (which means all debts will be paid), then the other should not filed together. That way, the filing spouse’s Chapter 13 Plan payment will be lowered than if both spouses filed together and include debts of the separated or estranged spouse. You might ask: “what is the point of filing Chapter 13 Bankruptcy if all the debt will be paid anyways?” Because the filing spouse will NOT have to pay the absurdly high credit card interest rates of about 30% plus late fees if she were to try to pay off the debt herself. The interest adds up. Do the math.
The purpose of this website is not a substitution for a consultation with an experienced Sacramento Bankruptcy Attorney. For more information, call Muoi Chea. She offers free phone consultation to see if Bankruptcy is the right option for you. Muoi Chea is an experienced Bankruptcy Attorney in Sacramento, Stockton, Fairfield, CA serving residents and small businesses in Elk Grove, Citrus Heights, Carmichael, Fair Oaks, Orangevale, Galt, Lodi, Stockton, Manteca, Lathrop, Tracy, Modesto, Ceres, Patterson, Woodland, Davis, West Sacramento, Roseville, Rocklin, Folsom, El Dorado, Vacaville, Dixon, Fairfield, Vallejo and surrounding counties and cities in Northern and Central California.