When you get married, you can no longer see yourself as an independent. All decisions you make from the day get your marriage certificate and onward will somehow affect your spouse, but what about bankruptcy?
There are often instances when one spouse has debt issues going into a marriage, and they only intensify throughout their time together. Upon realizing the full scope of the problem, you consider filing bankruptcy but are wary of your spouse’s income and assets being affected. Here are the answers to some of the most common questions you may have when considering the pursuit of single-spouse bankruptcy.
Do We Have to File Bankruptcy Together?
It is not required for married couples to jointly file bankruptcy; however, there are a few key considerations. For starters, any debt that you go into a marriage with remains separate from your spouse’s when filing bankruptcy. Although you can file independently, the bankruptcy process will likely affect joint assets.
Does Filing Bankruptcy Independently Affect Joint Assets?
Louisiana is a community property state meaning that both spouses jointly and equally own a majority of the property acquired during the marriage. This remains true even if only one spouse’s name is on the title. All community property becomes a part of your bankruptcy, and the bankruptcy trustee may want to look into your spouse’s separate assets to ensure that they are indeed separate.
Before filing, you should make sure that you have enough exempt assets to protect your community property. The drawback of filing bankruptcy independently is that you lose the opportunity to double exempt assets as you would be able to if you filed jointly with your spouse.
Independent Bankruptcy and Joint Debts
Joint assets are at stake in Louisiana single-spouse bankruptcies, but that is not the only way your spouse may become involved in your bankruptcy. Joint debts will also become a part of the bankruptcy. As a result, the occurrence of filing bankruptcy will show up on the credit report of your spouse as well. The bankruptcy will also affect the creditworthiness of you both if you go to apply for a loan afterward.
Will Collection Calls Continue?
The non-filing spouse remains responsible for separate and joint debts, thus allowing creditors and debt collectors to pursue collection on past-due accounts. There is, however, one key advantage to living in a common property state. All joint debts you discharge during bankruptcy will also apply to your spouse. This means that creditors will be disallowed from pursuing collection on joint debts from that point on and will only be able to pursue the separate property of your spouse. This includes:
- Items acquired before marriage
- Gifts received during the marriage
- Property acquired through inheritance
It doesn’t stop there. All property acquired by your spouse after the conclusion of the bankruptcy is entirely off-limits to creditors as well.
How to Handle Debt Collectors
During the bankruptcy process, creditors are disallowed from contacting you for debt collection, but they commonly contact the spouse of a debtor for debt recovery. If you believe that the calls are intended for your non-filing spouse, you can start by requesting proof of the debt of which they must provide.
If it is found that anyone other than you is responsible for the debt, you can request for them to stop contacting you in regards to that account. If the debt in question is yours and you are currently in the bankruptcy process, have your lawyer issue an automatic stay to put an immediate halt to all collection efforts.
Do I Need a Lawyer to File Bankruptcy?
It is not required to have a lawyer to file bankruptcy, but it is highly recommended. The bankruptcy process is just as complex as it is stringent. You have strict submission deadlines to meet before a judge even considers your bankruptcy. Missing a deadline, submitting an incomplete application, or making the honest mistake of filing paperwork in the wrong court can result in your bankruptcy being dismissed by the judge.
As a result, you’ll be unable to refile for another 180 days. During this time a creditor can obtain a default judgment as a result of a debt lawsuit and garnish your wages, freeze your bank accounts, and seize your assets. Avoid potentially worsening your unfavorable financial situation by acquiring a knowledgeable bankruptcy attorney the first time around.
Your attorney will be able to do the following:
- Put an end to all debt collection harassment
- Advise you on whether Chapter 7 or Chapter 13 is most beneficial to you
- Ensure that you meet submission deadlines
- Provide in-court representation as needed
The Louisiana bankruptcy attorneys at E. Orum Young Law Offices have the experience needed to lead you through a successful bankruptcy. With over 20,000 cases filed, we have handled the most bankruptcies in Northeast Louisiana. We understand the vitality of recovering from your debt issues and are here to provide advice, guidance, and representation every step of the way. Attorney Jacob Rennick concentrates on consumer bankruptcy, and has been awarded the Gold Medal Congressional Award by the United States Legislature. Contact us today for a free case evaluation. Our Trial Guarantee ensures that we will take your case to trial per your request.