Married Couples Do Not Have to File Bankruptcy Together Says Iowa Bankruptcy Lawyer
Des Moines, IA (Law Firm Newswire) November 10, 2011 – Married couples may file bankruptcy together if they wish to but it is not a must.
“If you’re married and you want to file jointly for bankruptcy, then that is fine. It is not written anywhere that you must file together. In other words, there is no requirement under bankruptcy laws to file together,” explained Kevin Ahrenholz, an Iowa bankruptcy lawyer.
Generally speaking, there are two kinds of bankruptcies that people may choose to file, and those are a Chapter 13 or a Chapter 7 bankruptcy. The Chapter 13, the wage earner’s plan, lets debtors with a regular paycheck draft a plan to repay all, or part of the debts, over a three to five year period. In contrast, the Chapter 7 plan usually results in the liquidation of a debtor’s assets and is considered to be the quickest way to file, not to mention the easiest.
When a Chapter 7 is filed by just one spouse, they need to be very careful as to which property is property of the bankruptcy estate. What defines a bankruptcy estate? It is the property and assets in the estate that determine what might be available to pay creditors. Additionally, there is a broad definition of property under Bankruptcy Code 11, as property is all legal or equitable interests of the debtor in addition to any property that is community property of the spouse and debtor.
“There is also exempt property, which is not subject to liquidation as outlined by federal or state law, and it is considered to be the property of the estate, that is until the exemption claims are final. That usually happens about a month after the 341 meeting of the creditors,” Ahrenholz explained.
Do not confuse community property in the area of bankruptcy law with community property in divorce law. “An example may be that an individual may have a title to a truck, and it might be community property during a divorce,” Ahrenholz said. “However, in a bankruptcy proceeding, it may be viewed as non-estate property.”
“There are various ins and outs when it comes to what you can and can’t do, and what you may and may not keep. It’s not easy to figure that out on your own without making a costly mistake. For this reason alone, I seriously recommend hiring an experienced Iowa bankruptcy lawyer,” suggested Ahrenholz.
In a Chapter 13 bankruptcy, if one spouse wants to file, the bankruptcy estate is kept intact with a plan to pay off creditors using the person’s left over income from work. In this instance, any property (includes community), is protected on filing and by the automatic stay that kicks in at the time of filing.
“If your home is community property, and it’s about to be repossessed, the minute you file for bankruptcy, the repo process must halt, until the stay is lifted. If it’s a Chapter 13 filing, the stay could be up to five years and remain until after bankruptcy discharge. If you have secured loans, the court mandates that you keep your payments current,” Ahrenholz outlined.
This is not an easy area of the law to comprehend, and if a person choosing to file on their own makes a mistake, they may well be charged with fraud. It is so important to get things rights and go through the process in an orderly and legal fashion. “I can’t stress this enough,” said Ahrenholz. “Bankruptcy is complex and one mistake and that whole house of cards can come tumbling down. Please, give my office a call. It’s my job to help you get through the process with as little hassle as possible.”
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.
309 Court Ave., Suite 805
Des Moines, IA 50309
Offices in Des Moines, Cedar Rapids, Waterloo, Mason City, and Vinton.
[iframe http://www.iowachapter7.com 100% 500px]