Contrary to popular belief, when couples are married, they do not necessarily have to file for bankruptcy together. Instead, it might make more sense for only one of the spouses to file. The unique facts of your case will dictate whether filing together or on your own will make sense. How long you have been married, where you are located, and whether you have joint debts will all affect the decision to file together or separately. Below are just a few factors that married people may want to think about if they are considering filing for bankruptcy in Ohio.
The Debts Involved
In many cases, the individual considering bankruptcy has one or more debts that they specifically need to address through the bankruptcy. If those debts just belong to one spouse (sometimes because that spouse came into the marriage with debt), then filing individually might make more sense.
Consider an example. Imagine the husband enters into the marriage with some business debt. The spouse does not have their name on any of the debt. In that situation, although there might be other debt involved in the bankruptcy, the main goal is to address the business debt that has nothing to do with the spouse. Under this specific situation, it may make sense for the husband to file bankruptcy, so the spouse can avoid the negative effect on her credit.
The Assets Involved
If the couple files for bankruptcy together, both of their assets will be considered. The couple can use their various exemptions to protect things like the house, their vehicle, and some family heirlooms. In Ohio, in most but not all cases, couples must use the Ohio exemptions, and these exemptions double for married couples. If a couple has not lived in Ohio for at least 2 years they may have to use other exemptions, either Federal or from the state they previously lived in. Exemptions are limited for bank accounts and some investment accounts.
If the double exemption under Ohio law works to protect more assets, it might make sense for the couple to file together. However, if significant assets belong to just one spouse that will not be protected by an exemption, filing individually might be more advantageous.
Income Considerations
Individuals or couples might not qualify for a Chapter 7 liquidation if their income is too high. If you are living with your spouse, their income will still be considered as part of the “means test” to determine whether Chapter 7 or Chapter 13 is appropriate. Whether filing jointly or individually, the spouse’s income must still be considered for either Chapter 7 or Chapter 13.
Convenience and Costs
Bankruptcy requires a thorough reporting of your financials. Whether filing jointly or individually, you will need it will be easier to provide financial information for your whole household rather than attempting to divide costs or income. Further, when couples file together, there is only one set of documents, one filing fee, and one meeting of creditors—the spouses essentially get to do everything together. This is not only more convenient, but it may cut down on costs as well.
Speak with an Ohio Bankruptcy Lawyer for More Information
Every case is slightly different. You can get tailored advice for your situation from an Ohio bankruptcy attorney. Cozmyk Law Offices, LLC is here to help! Contact us for more information by calling (877) 570-4440.
