To elaborate a litte:
Let's say two people decided to get married and then they bought a house. Both of them bring their cars, furniture, appliances, etc. from their apartments to the new house. Then one of the spouses decides they need more stuff, so he/she charges up debt on a new TV, new furniture, new appliances, and the couple gets a new car. Later, the spouse who charged up all this stuff loses his/her job and decides to file bankruptcy.
The non-filing spouse's car, furniture, etc. is not part of the estate because it was purchased or received before the marriage. The house, new car, and all the new property is part of the estate because it was part of the marital community. The filing spouse's personal property, before marriage or not, is also part of the estate.
All income from both parties is considered on the means test because it is marital income. However, if the non-filer has nothing to discharge, the bankruptcy wouldn't hit their credit because there is nothing to discharge on their credit report. It's complicated and may cause problems if the non-filer has trouble proving what was purchased before marriage, but by the books, it's not part of the estate.
Now if both spouses have debt, it is ALWAYS best to file jointly, community property state or not (mainly because it's cheaper). But in some cases, it does make more sense for only one to file to avoid the other losing property or taking a credit hit which would leave both debtors with no access to credit for emergencies later in the marriage.
Another thing to be wary of is the non-filing spouse's status as an authorized user. All the bad credit will stay on their credit report unless the filing spouse removes the authorization to use his/her credit card. It is also important for the non-filer to check their credit reports and dispute anything that should have been removed, before AND after the BK.
At least this is the way it works in Ch. 7. Ch. 13 would be tougher because the 'family' budget includes the entire household's income and expenses, so although the credit report could be salvaged, the non-filer would have to participate in the court-ordered repayment plan, which could have negative consequences should he/she decide to charge credit cards if the payment plan doesn't allow for what he/she wants to spend - this could push the non-filer into becoming a filer later AND it could be much more scrutinized by the BK court.
Let's say two people decided to get married and then they bought a house. Both of them bring their cars, furniture, appliances, etc. from their apartments to the new house. Then one of the spouses decides they need more stuff, so he/she charges up debt on a new TV, new furniture, new appliances, and the couple gets a new car. Later, the spouse who charged up all this stuff loses his/her job and decides to file bankruptcy.
The non-filing spouse's car, furniture, etc. is not part of the estate because it was purchased or received before the marriage. The house, new car, and all the new property is part of the estate because it was part of the marital community. The filing spouse's personal property, before marriage or not, is also part of the estate.
All income from both parties is considered on the means test because it is marital income. However, if the non-filer has nothing to discharge, the bankruptcy wouldn't hit their credit because there is nothing to discharge on their credit report. It's complicated and may cause problems if the non-filer has trouble proving what was purchased before marriage, but by the books, it's not part of the estate.
Now if both spouses have debt, it is ALWAYS best to file jointly, community property state or not (mainly because it's cheaper). But in some cases, it does make more sense for only one to file to avoid the other losing property or taking a credit hit which would leave both debtors with no access to credit for emergencies later in the marriage.
Another thing to be wary of is the non-filing spouse's status as an authorized user. All the bad credit will stay on their credit report unless the filing spouse removes the authorization to use his/her credit card. It is also important for the non-filer to check their credit reports and dispute anything that should have been removed, before AND after the BK.
At least this is the way it works in Ch. 7. Ch. 13 would be tougher because the 'family' budget includes the entire household's income and expenses, so although the credit report could be salvaged, the non-filer would have to participate in the court-ordered repayment plan, which could have negative consequences should he/she decide to charge credit cards if the payment plan doesn't allow for what he/she wants to spend - this could push the non-filer into becoming a filer later AND it could be much more scrutinized by the BK court.
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