Can I File for Bankruptcy Without My Spouse in Pennsylvania?
Every year, thousands of hard-working Pennsylvanians face burdening debt. Through no fault of your own, you might see yourself feeling the pressure of overwhelming debt. Many things can lead to financial difficulties, such as a medical condition, an accident, or an unforeseen lay-off. Fortunately, bankruptcy can provide you with the necessary tools to get rid of most or all of your debt. Bankruptcy is an excellent option for those looking for a fresh financial start. Married couples can also have the chance to file for bankruptcy together. However, what happens if you are married but decide to file individually? Our Pennsylvania bankruptcy attorneys at Young, Marr & Associates invite you to keep reading as we discuss whether you can file for bankruptcy without your spouse in Pennsylvania.
Am I Allowed to File for Bankruptcy Without My Husband or Wife in Pennsylvania?
Under Pennsylvania law, there is nothing preventing one spouse from filing for bankruptcy without the other. For many married couples, it makes sense for one of the spouses to file individually rather than jointly. For instance, if the filing spouse has an outstanding debt in their name and the other spouse has excellent credit, it would make more sense for the indebted spouse to file individually. You are under no obligation to file for bankruptcy with your spouse in Pennsylvania.
However, there may be situations where filing with your spouse might be better. For instance, if both you and your spouse have significant debt, filing jointly may provide you with the necessary tools to discharge most or all of your unsecured debt. Filing for bankruptcy can provide you and your spouse with excellent benefits such as an “automatic stay” – which we will discuss later on. However, making use of such a tool may have limitations when couples file jointly.
Filing for bankruptcy requires careful consideration and analysis of your financial situation. It is essential to have a clear idea of all of your debt and your creditors. By taking preemptive steps to organize your case, you will have a clearer idea of whether you should file for bankruptcy jointly or individually.
Will My Bankruptcy Affect My Spouse’s Credit in Pennsylvania?
Many bankruptcy filers worry that their bankruptcy will impact their spouse’s credit score. People who file for bankruptcy and get debt discharged might see a reduced score on their credit report for some time. However, this status will not be permanent. As you “start from scratch” after your discharge, you can start rebuilding your credit and get back in good financial shape. Fortunately, if you file individually, you won’t usually affect your spouse’s credit.
However, the story can be different if you and your spouse both have joint debts. Joint debt acquired while married can negatively impact your score if you or the co-debtor fail to make timely payments to their creditors. Late payments on your debt can decrease your spouse’s credit score if both of your names are on the account.
Filing for Chapter 7 and Chapter 13 in Pennsylvania without Your Partner
Before filing for bankruptcy in Pennsylvania, it is important to understand what bankruptcy is and how it can help you manage excess debt. Chapter 7 and Chapter 13 bankruptcy are the most common types of bankruptcy in Pennsylvania. While each of them has the same goal – discharging debt – they work differently. We discuss each of these chapters below.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy or “liquidation bankruptcy” is one of the most common types of consumer bankruptcy. Through Chapter 7, you can discharge most or all unsecured debt. Unsecured debt is any general obligation that is not backed by collateral.
Usually, the whole Chapter 7 process can take up to six months to complete. However, before you can get the benefits provided by Chapter 7, you need to qualify for eligibility.
The qualifying process requires all petitioners to go through what is known as the “means test.” Through bankruptcy means testing in Pennsylvania, bankruptcy courts will determine whether you are eligible to file under Chapter 7. In this test, your income will be compared with your state’s median income.
If your income is above the state’s median income, you won’t be able to qualify for Chapter 7 bankruptcy. However, this doesn’t mean you will be left without a remedy. You may still be able to file under a different chapter, such as Chapter 13. If you do qualify under Chapter 7’s requirements, you may proceed with your liquidation bankruptcy.
The court will appoint a trustee who will oversee the whole bankruptcy process in Pennsylvania. The trustee will be in charge of selling non-exempted property and distributing the proceeds equally among your creditors. Once this process is over, you can get your bankruptcy discharged.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy or “wage earner’s plan bankruptcy” is available to those with enough means to pay back their debt. Through this chapter, you design a three-to-five-year repayment plan. Your plan has to be approved by the bankruptcy court.
Once your plan is approved, you can start repaying your debt. It is essential to meet all of the requirements stipulated in your repayment plan. If you miss your payments or otherwise breach the stipulations in your repayment plan, you could lose your chance of getting debt discharged through bankruptcy.
Automatic Stay in Pennsylvania Bankruptcy Cases for One Spouse
When you file for bankruptcy with or without your spouse, you get the benefits of an automatic stay. This happens under both Chapter 7 and Chapter 13.
An automatic stay is an injunction order to stop creditors from collecting debt. Additionally, the automatic stay can protect your home from foreclosure. These benefits are available to qualifying petitioners automatically at the moment they file for bankruptcy.
Pennsylvania Bankruptcy Attorneys Offering Free Consultations
If you or a loved one is facing a difficult financial situation in Pennsylvania, we can help you manage excess debt through bankruptcy. Over the years, Young, Marr & Associates have gained the necessary skills and experience to guide you through the bankruptcy process in Pennsylvania. We understand that dealing with debt can be stressful and overwhelming. However, you don’t have to go through this challenging time alone. Call our Pennsylvania bankruptcy lawyers today for a free, confidential consultation. Our phone number is (215) 701-6519.
☑ Been paying credit card balances that seem to never go down?
☑ Lost your job and are now having trouble keeping up?
☑ Attempted to work out a payment arrangement to no avail?
☑ Been notified of a mortgage foreclosure action?
☑ Been denied for a mortgage or other line of credit?
If the answer to any of these questions is “yes” then bankruptcy may be an option that you should consider.