New Jersey Bankruptcy Lawyer Explains When One or Both Spouses Should File for Bankruptcy Protection

The obligation to pay the debt is based on an agreement between the person(s) and the creditor. One spouse is not responsible for the other spouse’s debt solely because of the marriage. If only one spouse has agreed to pay a debt, then only that spouse is responsible for the debt. If both spouses are obligated and have agreed to pay the debt, then both spouses are responsible for 100% of the debt. If both spouses have agreed to pay the debt, the creditor can pursue and collect any percentage of either spouse’s debt, but never in excess of the total amount owed. In other words, the creditor can get 60% from one spouse and 40% from the other, or 20% from one spouse and 80% from the other spouse.

If two people want to file bankruptcy together, the two people must be married. In general, it is not necessary for both spouses to file for chapter 13 or 7 protection. When evaluating whether one spouse should file individually or jointly, each person should carefully consider all of their financial circumstances, independently and together with the other spouse. . It may not be beneficial for both spouses to file for bankruptcy protection.

A person who files for chapter 7 bankruptcy protection and meets all the criteria will cancel and eliminate certain debts. The following scenario relates to a married couple who have a joint debt with a creditor and only the husband files for chapter 7 bankruptcy protection. If the husband meets all of the chapter 7 criteria for a discharge, his debt to the creditor will be deleted. However, the creditor will be allowed to pursue the wife for any balance owed to the creditor because she is not protected from filing for bankruptcy. If you file a joint return and get a discharge, the creditor will not be able to pursue you for the debt.

Unsecured debt is debt that is not secured by property, such as: credit card debt; personal loan; and, health care debt, etc.

The following pertains to a chapter 13. In a chapter 13, the person(s) filing (debtor) must make monthly payments to a trustee (trustee), generally for a period of 36 to 60 months. The amount and number of payments are based on numerous factors. In addition, the determination of which creditors are entitled to the funds from the trustee’s monthly payment is based on numerous factors. The debtor may be required to pay all, part, or none of the unsecured debt, through the trustee’s monthly payments (bankruptcy plan).

In a chapter 13, the debtor is required to treat all unsecured creditors equally. Therefore, a spouse filing an individual return cannot decide to pay 100% of the debt to one credit card company and 5% to another credit card company. Generally, if one unsecured creditor is paid 100%, all unsecured creditors must be paid 100%. If unsecured creditors are receiving less than 100%, each creditor must be paid pro rata.

The following scenario involves a husband who owes a joint debt to his wife and files a chapter 13, individually and without his wife. Immediately after the chapter 13 filing, the “automatic stay” and “co-signer’s stay” apply. of pursuing the spouse (wife) who does not file bankruptcy, who has a joint debt with the spouse (husband) of the affair (husband) does not pay 100% of the debt to the unsecured creditor. , who files individually, pays less than 100% to an unsecured creditor, the creditor may apply to the court for permission to proceed against the non-filing joint and several debtor spouse, for the balance that will not be paid through trustee payments.

An individual may file a Chapter 13 in order to save a home from foreclosure. Generally, if the mortgage(s) and note(s) are in both spouses’ names, and they cannot modify either mortgage and/or note, only one spouse should apply for save the house from foreclosure.

An individual may file a chapter 13 in order to save a car from repossession. Generally, if the financing is in both spouses’ names and they cannot modify the financing agreement, only one spouse needs to apply to save the car from repossession. If the financing is in the name of one of the spouses, generally only that spouse would have to apply to save the car. This interpretation may vary.

New Jersey Bankruptcy Attorney, Robert Manchel, Esq. is the author of this article. Robert Manchel is certified as a consumer law bankruptcy attorney by the American Board of Certification, which is accredited by the American Bar Association.

Additional bankruptcy information may be obtained by calling Mr. Manchel toll-free at 1(866)-503-5655 or by visiting his website at http://www.bankruptcylawyer-nj.com

Robert Manchel handles cases from the following counties: Cumberland: County; Atlantic County; Salem County; Gloucester County; Camden County; Burlington County; Hunterdon County; Somerset County; Middlesex County; ocean county; Mercer County; Monmouth County; and Philadelphia.

Disclaimer: Bankruptcy laws are complex and may be applied differently from case to case and state to state. There can be numerous exceptions and variations to each law and rule. Do not trust the information provided in this article. If you are considering filing for bankruptcy protection or have foreclosure issues, you should consult with an experienced attorney. We are a debt relief agency. We help people file for bankruptcy relief under the bankruptcy code.

© 2008 Copyright Law Offices of Robert Manchel. All rights reserved.

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