Does it Matter If My Spouse and I Are Separated for a Bankruptcy Filing?
If you are planning to file for divorce, but you and your spouse are currently separated, you may be concerned about how the separation will impact the bankruptcy filing and whether you will need to take additional steps to account for your separated status. In some states, spouses can become legally separated, which typically involves a formal and legal distribution of marital property between the parties according to state law. Other issues commonly addressed in divorce may also arise, such as spousal maintenance or alimony, as well as parenting time and child custody. In such states, legal separation can affect a bankruptcy filing. In Florida, however, there is no such thing as legal separation.
To be clear, in Florida, while you and your spouse may be separated in that you are either living separate and apart from one another, or you are still in the same house but have decided to end your marriage, your bankruptcy filing is not going to be significantly different than it would be if you and your spouse were still happily married. Our West Palm Beach bankruptcy attorneys can explain in more detail below.
Married Spouses May File for Bankruptcy Jointly, but No Requirements to Do So Exists
First, whether you are living in the same house as your spouse — either comfortably in your marriage, or technically separated — or you are living separate and apart from your spouse, you and your spouse still have the option to file for bankruptcy jointly, or you may file individually.
In other words, as long as you are legally married (and since no legal separation is available in Florida), you can choose to file jointly for bankruptcy as a married couple, or you can file individually. There is no requirement either way.
Separating Your Expenses When You Are Filing Individually
If you are planning to remain separated for a significant time period and you want to file for bankruptcy individually, you should be aware that your spouse’s income could impact your eligibility for Chapter 7 bankruptcy. In the event you are considering a liquidation bankruptcy as an individual filer, you should speak with a bankruptcy lawyer about the marital adjustment deduction that may allow you to separate your expenses from your spouse’s, and can reduce the effect of your spouse’s income on your Chapter 7 eligibility.
Considerations if Divorce is Imminent
If you and your spouse are planning to divorce in the near future, this should be a consideration as you think about filing for bankruptcy, either jointly or individually on your own. If you file for Chapter 13 bankruptcy jointly, the bankruptcy case will last for three to five years. Divorcing in the middle of the bankruptcy will involve significant complications and, potentially, strife for you and your spouse. In addition, if you are planning to file individually for Chapter 7 bankruptcy, the process may be significantly easier after your divorce — when you have only one household and one income, and after marital property has been distributed between you and your spouse.
Contact a West Palm Beach Bankruptcy Attorney for Assistance with Your Case
Anyone who is separate and planning on a bankruptcy filing should seek legal advice from one of the experienced West Palm Beach bankruptcy lawyers at Kelley Kaplan Delaney & Eller, PLLC. Contact our firm today for assistance.
Source:
law.cornell.edu/uscode/text/11
