One of the requirements in any bankruptcy filing is an income declaration. Your income will determine which type of bankruptcy you are eligible to file. If you are filing a joint bankruptcy petition with your spouse, it would be quite straightforward. Both your incomes need to be declared.
But if you are making a bankruptcy filing as an individual, you are still required to declare your spouse’s income. This is because you have to declare your whole household income. This applies to both types of bankruptcy, Chapter 7 and Chapter 13.
If you and your spouse live together in the same home, you would have to report the income of both you and your spouse so that it can be used for the means test which reviews eligibility of the individual spouse seeking protection under Chapter 7 bankruptcy.
On the other hand, if you file a Chapter 13 petition (assuming you do not earn below the means test level of income to qualify for Chapter 7), the income of your spouse is still needed to determine how much disposable income you may have. Disposable income is the amount of money you have left each month after paying necessary expenses. This information helps determine monthly payments for the repayment plan. In some cases, the income of the non-filing spouse could affect eligibility of Chapter 7, unless their income contributes more to household and living expenses.
Another consideration is the marital adjustment deduction. If you are married and filing for bankruptcy on your own without your spouse, you may qualify for a marital adjustment deduction. This depends on how much income your spouse contributes to the household income or if you have your own expenses you cover such as credit card debt, student loan debt, or other obligations in your own name.
For more information and to discuss how bankruptcy can help you eliminate your debts, call us at (813) 200 4133 for a free consultation.