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Non filing spouse marital adjustment

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    Non filing spouse marital adjustment

    Suppose a non filing spouse's income is used to pay their own credit cards and the rest goes into saving account owned only by the non filing spouse. Since, in this case, all the non filing spouse's income does not contribute to any household expense, could the full amount be used as the marital adjustment?

    The savings would not be allowed. Likely, it would be treated as money available to the household... to pay household debt (just as it would normally under non-bankruptcy). The Chapter 13 and Chapter 7 Trustees will nitpick anything that you put in the so-called marital adjustment boxes. Otherwise a person who is married, living in the same home, with a spouse with significant income, could shield most of the marital income from the bankruptcy.

    The reason is that, whether filing jointly or just one is filing, all income of the marriage is included. In fact, all other household contributions are included, so if you have adult children that are working, they are likely offsetting your expenses as well. Each $ that you want to exclude from the non-filing spouse will need to be explained and likely require documentation. Expect the Trustee to be very interested in each expense that you are attempting to offset.

    Since this looks like you want to file Chapter 7, the United States Trustee (UST) will likely become very interested in your case. The UST is likely going to demand documentation of these "separate" expenses. Regardless of the documentation demand, the non-filing spouse can include a variety of personal expenses from 401(k) savings to a gym membership. However, the expense may require sufficient documentation of the expense both in the past and continuing into the future.

    (Notes: any savings already in the non-filing spouses account is protected as their personal property. Make sure there was no commingling -- in case the Trustee goes snooping to see if that money was ever in a joint account. Additionally, if you have any joint creditors there are likely going to be issues with the discharge, especially tax debt, as the creditors will go after the non-filing spouse. If you are under-the-median -- as a household -- it is unlikely that there would be the extra scrutiny.)
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog

    I am not an attorney. Any advice provided is not legal advice.


      tg16, my wife and I went through a very difficult patch between 2008 and 2015, not only did both of our small businesses fail, but our marriage nearly failed as well. By the time bankruptcy was a "when not if" scenario in our collective futures, she stated she wanted out of the marriage in no uncertain terms, and we ended up separating in 2013. In 2014 she filed for a Chapter 7, and in 2015 I filed for a Chapter 13; due to our separation, the scrutiny our filings went through was significantly reduced compared to what we would have had to endure had we stayed together.

      I told you the above story to kinda-sorta suggest this; have the two of you considered separation? If so, it might make life easier in the near term.

      Epilogue to my story above; once the extreme financial stress we were under abated, we started spending time with each other again, and ultimately got back together.
      Latent car nut.


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