Category: Chapter 7

bankruptcy affect spouse

Will filing bankruptcy affect my non-filing spouse?

I am often asked whether filing bankruptcy affect the non-filing spouse. Simply the answer is yes, the bankruptcy will likely affect your spouse. See below for the descriptions of how your non-filing spouse could be effected.

I am often asked this when consulting with a prospective client where one spouse is in financial trouble and the other non-filing spouse has a good job and little to no debt issue. Often, the situation is that the spouse in the better financial situation does not want the other spouse’s debt issues to impact his/her income or the assets that they hold jointly.

Things to know about filing bankruptcy when you are married:

  1. It is not a requirement that a married couple both file bankruptcy together. You can file your bankruptcy without including your spouse as one of the Debtors in the case, but it will indicate on the bankruptcy filing that you are married and that your spouse did not file.
  2. Your non-filing spouse will have to provide income information. Bankruptcy requires a lot of financial disclosures. The bankruptcy process takes into account the household size, household income and household debts. This information is used in the means test to determine whether a person is eligible to file chapter 7 bankruptcy. Alternatively, in a chapter 13 bankruptcy, the information determines the plan payment amount and the length of the plan (36 or 60 months). This means even though your spouse did not file bankruptcy, the non-filing spouse will have to provide information for the disclosures to be accurate.
  3. The non-filing spouse’s credit should not be effected. Your spouse is not providing his/her social security number, so his/her creditors and/or employment will not be notified of a bankruptcy. However, be warned that joint accounts will show that the obligation was included in a bankruptcy and automatic payments may stop. You may have to pay with good, old fashion checks since the electronic and phone payment options may not be available for the first few months of your bankruptcy.
  4. The trustee will know if you try to hide your non-filing spouse’s income. A federal bankruptcy filing is done under penalty of perjury. In addition to the filing, you will need to provide support documentation and testimony to support your filing information. The trustee will be looking at bank statements, paychecks, tax returns and other financial documentation. Once the trustee finds out that you tried to hide your non-filing spouse’s income, then the trustee will likely get more aggressive because he/she will be wondering what else you were trying to hide.
  5. Household Income is the standard even if you keep everything separate. Unfortunately, even if you are a couple that keeps your finances separate, the bankruptcy process looks at the expenses of the household all coming out of the same pot of income.

To find out details and information about how a bankruptcy filing could affect your spouse in your particular situation, schedule your free consultation (305) 278-0811 with one of the bankruptcy attorneys in our office!

Why am I Being Sued for Foreclosure After Getting a Discharge in Bankruptcy?

Many clients come return to our office after we have helped them successfully discharge their debts in bankruptcy.  Some ask, “Why am I being sued for foreclosure after getting a discharge in bankruptcy?”  “Didn’t I give that property back in the bankruptcy?”

This scenario highlights two important issues:  Does filing a bankruptcy change ownership of property? Has the bank violated my rights by suing me after I got my discharge in bankruptcy?

Does Bankruptcy Change Ownership?

Sometimes a Chapter 7 Trustee will take a property and sell it.  This clearly takes it out of the debtor’s name, but this is a rare occurrence.  Most people with equity in a non-exempt property will not file a Chapter 7.  Instead, they will opt for a Chapter 13 to save it.  In most Chapter 7s, the Trustee will not take the property, either because it is homestead or otherwise exempt, or because it has no equity (the property is “underwater”).

After the Debtor receives their discharge, if the Chapter 7 Trustee has not sold the property the bankruptcy closes without any transfer of ownership.  And although the Debtor no longer has an obligation to repay the money borrowed, the lender still has the right to take it back from the Debtor through a foreclosure.

Has the Lender Violated the Debtor’s Rights?

Perhaps more important is whether the bank has violated a Debtor’s rights by suing after entry of a bankruptcy discharge.  The discharge order creates an injunction against all creditors from trying to enforce a discharged debt against a Debtor.  Creditors can seek enforcement against property upon which they have a mortgage, but cannot seek payment from the Debtor.

Sometimes a lender will seek payment from a Debtor after entry of a discharge.  If this happens, the lender has violated the court’s discharge order and injunction.  The result can be that the lender will have to pay damages, and reimburse court costs and attorney fees.

Call Us

If a lender has sued you after you received your discharge in bankruptcy, cull us to discuss your rights.


If I file a chapter 7 bankruptcy at the end of the year, will the Trustee take my tax refund in the spring?

The answer depends on the amount of property you own that is listed on schedule A and B of your chapter 7 bankruptcy schedules. Schedule A lists all your real property and any equity you have in the properties.

Continue reading “If I file a chapter 7 bankruptcy at the end of the year, will the Trustee take my tax refund in the spring?”

What is a 341 Meeting?

When you file a bankruptcy, you are required to appear at the 341 Meeting of Creditors (11 U.S.C. 341). You will receive notice of the time and date of your meeting from your attorney and the court. You will attend this meeting with your attorney about a month to 45 days after your case is filed. At this meeting, you will answer the questions of the trustee and possibly some of your creditors.

Continue reading “What is a 341 Meeting?”