Home -> Law Blog Directory -> Consumer Law Blogs -> Credit Law Network

Consumer Law

: Credit Law Network

Married and Separated (But Not Legally)

By Gini Nelson, New Mexico Bankruptcy Lawyer

There’s a good recent post here on the Bankruptcy Law Network about non-filing spouses — Springfield, and Marlborough, Massachusetts’ attorney Jed Berliner’s article on “non-filing” spouses. He wrote about the impact on the means test.

There are more implications, at least when  you are in a state like New Mexico, with community property and community debt.  There are several ways this can come up — Jed speaks more to the situation where the spouses are still living together. There’s also the situation where the spouses have separated, but have not gotten a divorce or a legal separation. That has complications, too, such as cooperation when things are no longer sweet music and roses between you.

Generally, I have to tell a client in this situation something like this, after having advised them, first, to have the non-filing spouse get legal counsel and possibly also file bankruptcy — this advice assumes the non-filing spouse is unwilling or unable to file for bankruptcy and is not or may not fully cooperate with my client:

Your spouse is not willing to also file for a bankruptcy. Thus, you will be filing as married, with a non-filing spouse. That has several implications, including:

1. Because you are still married and this is a community property state, the legal presumption is that all income made by each of you is still community income, and all debt incurred by each of you is still community debt.
2. You will need to request full income and asset, and expense and debt information from your spouse. If he or she does not provide it, we will so indicate on the papers filed with the Court.
3. You can ?claim? the non-filing spouse’s share of the ?homestead? exemption in the house, even though he or she is not filing.
4. Your non-filing spouse will have some protection against creditors for debts you also signed for and for which you get a discharge, so long as he or she is still married to you and you are alive. Once there is a divorce or you die, creditors can go against the non-filing spouse for debts for which you received a discharge.
5. Your discharge of debts in bankruptcy may  not defend you against claims your non-filing spouse may make against you in a divorce later.

I also inform clients that this can complicate their cases, which can mean their cases will take more time and cost more than an uncomplicated case.

This situation is an especially good one to be sure you get legal advice!

Gini Nelson is a Santa Fe, New Mexico bankruptcy lawyer who helps people file (or avoid) chapter 7 bankruptcy.

Liked This Article? Why Not Share It?emailLinkedInDiggStumbleUponFacebookGoogle BuzzTwitter

Full post as published by Credit Law Network on March 29, 2011 (boomark / email).