Spouse saving safe in Big Bank A??

[tg16]

ALL our banking is done at Big Bank A. I have credit cards in MY NAME ONLY, spouse has checking, saving and credit cards IN HER NAME ONLY. We have a joint checking account where we pay our monthly bills.
If I was to file for chapter 7 ONLY (without her), should my spouse be worried that HER substantial saving account could be held as payment to trustee? She is not part of this chapter 7 filing.

I have multiple cards from Big Bank A that I will burn at a chapter 7 discharge.

Thanks

[justbroke]

I'm going to go on a tangent for a moment, so please bear with me. You should definitely make sure there is no commingling of funds except where that is necessary; it appears that you do. Whether you can file Chapter 7 will largely depend on whether your are below-the-median income and/or your spouses "marital adjustment" isn't shredded to pieces by the Chapter 7 Trustee (and/or United States Trustee -- UST). The simple fact is that if your combined income puts you over-the-median, the Trustee/UST is going to pick apart the "marital adjustment" on what only the other spouse pays. The Trustee/UST will also pick apart every expense to the extent that the other spouse contributes to that expense.

Generally any personal property of a non-filing spouse is not included in the bankruptcy. If there is commingling of any funds it could be difficult to discern what's what in the account. It seems that you don't have that issue on the surface. (Are you commingling in the joint checking account to pay each other's credit cards, or only shared debt? Just a question.)

If you have substantial assets, or your spouse has substantial savings, you will need to make sure you do this this by the book. Do not move around any money. Hopefully those separate accounts have been like that for some time (so as to avoid the question of whether this was done to hinder, delay or defraud creditors).

As for whether Bank A can get to your spouse's other accounts may be a question related to that specific bank's policies and right of setoff. You would see that in the account documentation. For example, Bank of America has some interesting language on a right of setoff and that they don't care about the source of the funds in an account. The account which may be exposed is the joint account. I make no legal opinion about whether your bank would a.) exercise any right of setup, b.) target a joint account, or c.) try alternate ways to see if they can pierce any account partitioning.

Simply, I don't know. But we always say to not bank where you have significant credit extended, and especially where those credit accounts are at the risk of being setoff.

I wish I had a stronger answer, but these cases, where only one spouse is filing and the other has assets, money tin the bank, and solely held credit accounts, just makes the Trustee/UST look deeper. The setoff issue is another issue which you may actually have avoided based on how your accounts are partitioned.

[tg16]

Thanks for your quick reply.

Luckily, we are below the state median income and the wife works a few hrs a week bringing home minimum amount/week.

[justbroke]

Well that -- being under the median income -- shouldn't invite any scrutiny.

[bkandhappy]

the joint account will be in the BK, but the single accounts it depends as justbroke said, if you have moved and transferred any funds from that joint account to the single account of hers then that can be an issue. Our trustee was not that great and she made most of us at the 341 pull back 12 months of statements and she also made us show 2 months of forward statements after we filed. This was done to see if any monies were moved before or after we filed. One person had a rather large 2500 deposit from cash and a transfer of that money to another account right after they filed and she grilled them and then went even deeper in with those statements and it was a WOW.

lesson learned of dont move money around, if you did then you better be ready to explain what you did and why, other wise wait as long as you can to file so you can "spend down" that money and show proof that the money went to bills, car ect...