Sometimes a married client of mine will want to file bankruptcy without his spouse. There are different reasons for this, the most popular being that most, if not all, of the couple’s debts are just in one person’s name.
Spouses do not have to file bankruptcy together. However, we must use the non-filing spouse’s income when we calculate the debtor’s “current monthly income.” Current monthly income is used to a.) determine whether or not the filing spouse is eligible for Chapter 7 bankruptcy; or b.) to determine the filing spouse’s payment plan in Chapter 13 bankruptcy.
The good news, though, is that the non-filing spouse’s income has to be considered only to the extent it is contributed for the household expenses of the filing spouse. What that means is that the part of the non-filing spouse’s income that goes only to his or her expenses will be deducted from the filing spouse’s current monthly income. This “marital adjustment” may allow the filing spouse to qualify for Chapter 7 bankruptcy or greatly reduce the amount he or she will have to repay creditors in a Chapter 13 plan.
The means test is one of the most technical aspects of personal bankruptcy. If you are considering filing without your spouse, you should consider talking to a Colorado bankruptcy attorney to make sure that you can take full advantage of the marital adjustment.