Unmarried couples, partnerships, and corporations must file separate petitions.
If you are an individual and have a business entity, such as an LLC or a partnership, you cannot file a single petition for yourself and that business. In such a case you will note your interest in your company in your individual filing, e.g., John Doe, a member of Doe, LLC. If you are a sole proprietor, however, you may include your 100% ownership of the business in your individual bankruptcy.
Once a joint petition is filed, all property and debts among the two individuals in the marriage become part of the bankruptcy filing.
Sometimes it may be advisable for one spouse to file a petition alone and without the other spouse. An example is when the debts are owed only by the filing spouse, and not the non-filing spouse. Even though the non-filing spouse is not part of the bankruptcy, information regarding the income of the non-filing spouse must be included in the filing spouse’s statements and schedules. Why, you ask? Because the income received from the non-filing spouse may mean the filing spouse has the means to pay some or all of the debt.
The Bankruptcy Process
You can start the bankruptcy process by filing a petition with the bankruptcy court serving your area. You must file with the court
(1) schedules of assets and liabilities;
(2) a schedule of current income and expenditures;
(3) a statement of financial affairs;
(4) a list of creditors;
(5) copies of paystubs and pay advices received within 60 days of filing the petition;
(6) a monthly net income statement;
(7) a statement of reasonably anticipated increase or decrease in income or expenditures over the next 12 months; and
(8) a statement of intention regarding the retention or surrender of secured property. In addition, you must provide the assigned trustee with a copy of the tax return or returns for the most recent year as well as tax returns filed during the case. These documents must be provided for both spouses if filed jointly.
Between 21 and 40 days after the filing date, the trustee will call a meeting of your creditors. In the case of a joint petition, both husband and wife must attend the creditors’ meeting and answer questions regarding their financial status and property. Within ten days of this meeting, the trustee will communicate to the court whether the case should be presumed to be an abuse under the “means test.”
Benefits Of Joint Bankruptcy Filing
There are benefits to filing jointly. You will save on filing fees, as the fee is the same for both as it is for one.
Filing jointly will often give the couple a greater chance of keeping their property because of the “doubling” of exemption amounts. The homestead exemption amount is not doubled, however, with a total maximum exemption at the time of writing of $75,000, or $105,000, “if occupied as a home by an elderly or disabled owner, an elderly or disabled spouse of an owner, or an elderly or disabled dependent of an owner.” C.R.S § 38-41-201. Elderly means 60 years of age or older.
In addition, joint filing will save the married couple a lot of time. One and done.
Determining whether to file together or separately, whether to file for chapter 7 or chapter 13 bankruptcy, and ensuring the protection of as much of your property as possible is a complex process. Each couple’s situation is different, so it is important that a married couple considering a joint or individual petition consult an experienced Bankruptcy Attorney. As a former trustee for the U.S. Bankruptcy Court, with over thirty years experience, Attorney Martin Long is an expert in the industry with decades of experience in Colorado. We also serve Aurora, Centennial, Highlands Ranch, Denver, Lakewood, Englewood, Littleton, Castle Rock, Colorado and the Denver metro area with three convenient locations. For help with your financial matter, call the Law Office of Long & Long for a free initial consultation at (303) 832-2655.