The quick answer is no — if you are married you may file bankruptcy individually and your spouse does not have to file. However, this doesn’t mean that this is the best road for you to take. If the court determines that filing individually was not done in good faith, it may dismiss the case; and if you don’t file properly, even the non-filing spouse may be stuck with debts he or she didn’t expect to have. Therefore, it’s important to select an attorney who is experienced in Ohio bankruptcy laws and can help you decide whether or not you should file jointly.
If you need tailored bankruptcy guidance, contact a bankruptcy law firm that cares. Contact Fesenmyer Law Offices, LLC to speak with an experienced bankruptcy attorney today at 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati).
Common-Law State
Ohio is a common-law state, not a community-property state. This means that when you file individually, only property held by you or jointly by both spouses can be sold to pay creditors.
Often, spouses who have property in his or her name only and want to keep those assets may prefer to have the other spouse file individually. However, the bankruptcy court will examine factors such as total household income and total household expenses to make sure that the filing spouse is the one who should actually be filing for bankruptcy.
For example, your spouse might have run up bills remodeling the house, but since you are living in it as well, you are also responsible for any liens contractors may have put on it. With so much at stake, it may make sense to file jointly even if one spouse has run up most of the bills. Let’s take a closer look to see why.
Why Would You File Separately?
Whether you should file separately from your spouse for bankruptcy in Ohio depends on many factors. Each bankruptcy case and marriage are different, and some couples choose to file jointly and others separately. Here are some reasons why spouses may decide to file independently.
One Spouse Has Already Filed for Bankruptcy Recently
Bankruptcy laws require you to wait a specific amount of time between filings for bankruptcy. For Chapter 7, you must wait eight years after the completion of the bankruptcy to file another Chapter 7. For Chapter 13, the period is much shorter, at two years after the completion of bankruptcy proceedings to file another Chapter 13.
If you or your spouse have not waited the appropriate amount of time, the bankruptcy will not be allowed to proceed. The only options would be to wait or proceed with a single-party filing.
One Spouse Has Little to No Debt
When a person has little to no debt, it doesn’t make sense for them to file for bankruptcy. Although debts incurred during a marriage are considered marital debt, debt is still typically held in one person’s name and affects that person’s credit score and report exclusively.
In some instances, one spouse may have stellar credit and little debt, while the other has horrible credit and mountains of payments past due. In such a case, it would be optimal for the in-debt spouse to file for bankruptcy alone.
One Spouse Has Assets Free of Debt
A spouse with assets free of debt may want to carefully consider entering bankruptcy proceedings with their spouse, especially Chapter 7 proceedings.
At the beginning of bankruptcy proceedings, petitioners must list all assets. Ultimately, these assets may be liquidated if a couple goes through Chapter 7 bankruptcy. If liquidation is part of the plan, this may not be a problem. However, couples should be well aware that debt-free assets may be on the chopping block during bankruptcy if they are over the exemption limits.
One Spouse Has Good or Exemplary Credit
As most know, going through bankruptcy in Ohio has a major impact on a petitioner’s credit record. A bankruptcy on a credit report is undoubtedly a large black mark that remains for years.
For Chapter 7 filings, the reporting period is up to ten years, meaning every credit inquiry you undergo will turn up the record of your bankruptcy for a decade. For Chapter 13 bankruptcies, the reporting period is much shorter, at seven years.
A spouse with exemplary credit will see their credit take a hit with a bankruptcy. Their credit score will likely drop significantly at first, and they may have serious problems obtaining further credit in the short term.
Choosing to file jointly or separately is an important decision that should never be taken lightly. The ramifications of your choice can have long-lasting financial repercussions. As such, potential filers are strongly encouraged to seek experienced legal counsel before filing bankruptcy paperwork.
A bankruptcy attorney will thoroughly review your case and the unique factors of your situation and determine which course of bankruptcy action is right for you.
When the people of Ohio need effective bankruptcy representation, they turn to Fesenmyer Law Offices, LLC.
Why File Jointly?
Despite the reasons why married couples may not want to file jointly, there are various reasons why they may want to consider doing so. Remember that consulting with an experienced bankruptcy lawyer will get you the answers you need to make the most appropriate decisions.
Reasons for married couples to file jointly include:
- Bankruptcy eliminates marital and separate debt when both of the spouses file.
- One or both spouses have stifling debt.
- Both spouses may claim powerful bankruptcy exemptions when filing together, leading to double exemptions.
- Filing jointly costs around the same as filing individually and saves time.
Remember, filing for bankruptcy protection can help you drastically reduce or eliminate the bills you cannot afford while keeping some assets, such as your car and your house, but it has to be done correctly.
Bankruptcy Guidance and Counsel You Deserve
Bankruptcy issues are complicated, but the attorneys at Fesenmyer Law Offices, LLC understand the issues and the difficult decisions involved in taking this step. We will work with you to make sure you understand your options and help you decide on a solution that makes sense in your particular case.
Call Fesenmyer Law Offices, LLC at one of our office branches at 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati) for a free consultation so we can determine what debt relief solutions will work best for you.
