Des Moines, IA (Law Firm Newswire) July 19, 2012 – If one spouse declares bankruptcy, it may affect the other spouse. This depends on a number of factors.
Whether or a person’s spouse will be affected by their partner declaring bankruptcy, depends on a variety of different factors. Those things may include, the income of the spouse who is not filing for bankruptcy, joint liability for debts and if they own property.
No two cases are the same, which is why it is best to not assume that just because a friend or neighbor went through bankruptcy protection, that each situation is the same. For this reason, a married couple, with one about to file for bankruptcy, need to speak to an experienced Iowa bankruptcy lawyer and find out how the petition for bankruptcy may affect the non-filing spouse.
Kevin Ahrenholz, an Iowa bankruptcy lawyer, indicated that debtors need to be prepared to show the court a detailed list of their income and expenses for the complete household. Even if the other spouse is not filing, the court needs to determine how much money each spouse contributes to the running of the home.
Most married couples follow a silent rule about how much each pays towards their couple expenses, which is why the court wants to see how the bills are paid by both parties. Should the court ask for further information, the non-filing spouse is normally asked to provide bills and their pay stubs to a bankruptcy lawyer, to allow him to present the court with a complete picture of how the money is spent in the home.
“If both parties share ownership of some form of property, the non-filing individual may be impacted by the bankruptcy,” explained Ahrenholz. Federal and state laws let the person filing keep certain properties and assets. Because of that law, the properties are exempt, and cannot be used to pay creditors. Thus, property not included in the exemption rule may be used to pay creditors.
If property that was not included in the exemption laws is sold, the spouse that did not file for bankruptcy protection is reimbursed based on the percentage of their interest in the property. This can get quite complex, and it is in the debtor’s best interests to discuss their situation with a capable Iowa bankruptcy lawyer.
Kevin Ahrenholz is an Iowa bankruptcy lawyer and Iowa bankruptcy attorney. To contact an Iowa bankruptcy attorney, Iowa bankruptcy lawyer, or set up an appointment, visit http://www.iowachapter7.com or call 1.877.888.1766.
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Des Moines, IA 50309
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