The deduction for marital adjustment
Marriage is a blessing, but it always comes with challenges. Money can be a sore subject if you disagree about saving and spending, and if you are in debt, things can get quite stressful. If your debt has grown to the point where you have decided to file for bankruptcy, you will need to work as a team to start over. While most couples decide to file together, if the partners have significantly different income or debts, it may be better for just one person to file a Chapter 7. How you decide to file will determine which of your income and assets will be included. in the Means Test. To provide you with the best financial outcome and protect your assets, we will use the marriage adjustment deduction.
The basics
Filing for bankruptcy is not just about paying off your debts; It’s also important to do everything you can to protect the property and assets you’ve worked so hard to acquire. When only one spouse files for bankruptcy, we may deduct part of the non-filing spouse’s income that is used to cover their individual expenses. We can deduct your cell phone, club memberships, business expenses and entertainment. Also, debts that are only in your name will not be included in your case. This could be student loans, credit cards, auto loans, insurance, or a mortgage in your name only. Child support for your own children who do not live with you, as well as alimony they pay, will not be included in your case. You can also divide shared expenses, such as utilities or a joint mortgage, and deduct your share. . The point of all of this is to reduce the total income we use for the means test, which could mean the difference between a Chapter 7 or a Chapter 13.
Squared paperwork
As you use the standard and marital adjustment deductions, you will provide documentation to the court so they can easily review your case. The documents should be organized and clear, showing who is responsible for what debts and expenses, without giving the court any reason to reject any of our desired exemptions. There will be no reason to worry that your case will be dismissed or that the trustee will even suspect bankruptcy fraud.
Finding an attorney who can help you file all the paperwork and learn about your case will take some of the stress out of filing and hopefully bring some joy to your marriage.