Podcast #15: Joint Vs. Individual Filing With Spouse

Disclaimer

While the information given in this podcast is instructional, it is not intended to be taken as legal advice for your particular legal or financial situation. The recommendations that we give to one person may not be appropriate to your particular situation. The information contained in these podcasts is also not intended to replace the advice that you would receive from an actual consultation with a competent legal professional practicing in the area of consumer bankruptcy law.

Welcome

Welcome to Morsebankruptcy.com the podcast section. I’m Todd Morse, the owner of Morse Law and what we do on these podcast is take various bankruptcy topics and discuss them a bit. They come from different sources this one in particular comes from a visitor to our website who filled out a contact form. This visitor writes.

Viewer Question

I am currently unemployed, due to a surprise extended hospital stay during August and September of this year. I am also without health insurance, my medical bills have climbed up to over $18,000. I have also recently got married and my husband is trying to buy a house. All of my medical bills were under my maiden name I would prefer not to have my husband or his name marred anyway if I do need to file for a bankruptcy. Do I qualify for filling?

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Well there is several issue raised here, all very interesting but here is the one that jump out at me. This is not uncommon, in fact, the most common reason I have seen clearly over the last year or two people filling bankruptcy is medical bills. It’s just we’ve gotten to the point where medical treatment is so expensive in this country even though you are insured at a time that they receive it. If it’s rather serious or prolonged injury usually the percentage they pay is enough to force the bankruptcy filing. Even if they were insured.

So in this individual’s case they mention they are without health insurance now they have got this $18,000. They don’t seem to have the capacity to pay, which is the vast majority of us but to add a twist to things they have gotten married and certainly don’t want to drag their new beloved through a bankruptcy. Well you really don’t have to now that will play some role in it because under the new bankruptcy code we have to qualify everybody for bankruptcy under the household’s income but essentially that’s were that person’s contribution to your filing ends.

We would have to get copies of their income records just to establish what the household’s income was for the 6 months prior to filing. But bankruptcies are essentially filed under one social security number. So this would have yours on it have this visitor’s name on it. We would not have their spouse’s name on so wouldn’t do anything positive or negative to them. We would just be borrowing their numbers off of their income records to qualify the filer for either a chapter 7 or chapter 13.

Now this person also mentions that they have gotten these bills under their maiden name. I can see why they are thinking this either just in that still mindset trying to keep their new spouse’s name for getting mixed anything. But pretty much regardless of what your status was, marriage wise when you incurred the bills its what your status is as you filing the bankruptcy, what’s your marital status was on the day that you file the bankruptcy. So hopefully their marriage last longer than it takes to file a bankruptcy. So with that point they are gonna be a married individual. They would simply get married individual filing individually. So we would just use the husband’s income for qualification.

Then the person asks at the end do I qualify for filing. Well essentially we don’t know. We just do not have enough information here. Certainly you could file a bankruptcy but what chapter would still remain a mystery until you have done a consultation. And essentially what we would do is look to find out what is the chapter 7 income limit per person with your household size and then we add up the household’s income over the last 6 months, do the proper calculation, and find out if that income was below or above that chapter 7 limit based on their household size. If it was below sure they could file a chapter 7 and then we have to look make sure all their assets where protected and their transfers and if any question were made. And then if they were above the income limit for a chapter 7 we would look into a chapter 13 filing. In which case we would be paying back a percentage of the debt that the household could afford to pay back and then allow the rest of it to be discharged at the end of the chapter 13 plan.

Certainly a sweet person there and you gotta wish them the best in their new nuptials but you gotta love the fact that they are concerned more with their spouse than their own recent health troubles or the debts that came out of that. But you are perfectly capable as a married person of still filing a bankruptcy as an individual and not tarnishing and otherwise harming your spouse’s name in any way, shape, or form. So very sweet question and lots of good bankruptcy legal issues in there. For that reason it is just as good as it was with you.

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