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How Does Filing For Bankruptcy Affect My Spouse?

How Does Filing For Bankruptcy Affect My Spouse?

If one partner in the marriage is thinking of filing for bankruptcy, how much it will affect the other spouse depends on a few factors. Any debt that both spouses are joint and severally liable will remain the legal responsibility of the non-filing spouse. This means, if one spouse has filed for Chapter 7 bankruptcy and their debt responsibility is absolved of a joint debt, creditors can hold the other spouse responsible for the debt. If the husband or wife has chosen to file for Chapter 13 bankruptcy and they have worked out a payment plan to repay the debt, creditors will leave the other spouse alone.

Joint Bank Accounts

If you have a joint bank account with your spouse, filing for bankruptcy could affect that account if the bank decides to levy the account. Depending on the laws in the state in which you file for bankruptcy, you creditors could garnish the funds in your joint account for repaying your debts, even if your spouse was not responsible for the debt.

If your bank account funds are maintained by sources of income that are considered exempt under state and federal law, a creditor cannot garnish those funds. Exempted sources of income could include unemployment, child support, and disability benefits.

Your spouse’s income could also affect which bankruptcy option you qualify; this is because you are required to factor in your spouse income into the means calculation as disposable income. If their income is too high, it could exclude you from being eligible to file Chapter 7 bankruptcy.

Choose a Skilled Atlanta Bankruptcy Lawyer

If you are thinking of filing for bankruptcy, consulting an experienced Atlanta bankruptcy attorney will help you determine if bankruptcy is right for you and your spouse. At Khoshnood Law Firm, P.C., we have over a decade of experience serving the Atlanta and surrounding areas. We understand how difficult it can be to take time off work to schedule a consultation with an attorney, which is why we offer night and weekend appointments. Give us a call to schedule your free consultation.