Q If One Spouse Files for Bankruptcy, What Will Happen?
Only having one spouse file for bankruptcy is more logical than filing as a couple in certain scenarios. There are a few things to keep in mind if only one of you plan to file.
The "Means Test" When Filing for Bankruptcy
The filing spouse must include the paperwork of the non-filing spouse's income. When filing for chapter 7, this information is required to see if the spouse's income qualifies the "means test." If the non-filing spouse does not pass the means test, the couple cannot file separately.
The person filing is more likely to pass the means test if the couple lives in separate households. The filing spouse must still provide both incomes; however, the filing spouse can list his or her living expenses, and they are more likely to pass the financial qualification test.
Filing For Bankruptcy Independently
If a couple is separated, the other spouse's income will not be required in the filing process.
If one spouse is filing, the other spouse may be asked to sign a waiver detailing their exemption rights. Exemption rights allow you to keep certain assets. If the other spouse needs to file for bankruptcy at a later date, the same exemptions will no longer be available.
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