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Experienced Attorneys Assisting Couples file for Bankruptcy in Boise and Nampa, Idaho

Yes. This is what is called a joint case. In the joint case, you and your spouse’s assets and debts will be combined so that it will all be a part of the bankruptcy.

There are many considerations to take into account when determining whether a joint case is right for you and your spouse. Sometimes it makes sense. Sometimes you would be better off if you filed individually. Generally, it is advisable to file jointly to receive the maximum protection that bankruptcy can provide.

Idaho is a community property state. This is important because Idaho has opted out of federal bankruptcy law exemptions. Further, it impacts what is considered to be property of the bankruptcy estate.When a married individual (Spouse A) files for bankruptcy in Idaho, not only is his separate property included in the property of the bankruptcy estate, but also includes all of his or her interest in any community property, and all of his or her spouse’s (Spouse B) interest in any community property subject to the parties’ joint management and control. Therefore, even if Spouse B does not join in filing bankruptcy, Spouse B’s interest in the community property is subject to the bankruptcy and may be used to satisfy Spouse A’s “separate” debt. Because of this, unless there are extraordinary circumstances, a joint case is advisable.

For example, consider the following fact scenario:

  • Spouse A has a separate unsecured debt of $100,000 which Spouse B is not liable for;
  • Spouse B has separate unsecured debt of $20,000;
  • Spouse A and B have community debts of $50,000;
  • Spouse A has separate assets worth $10,000;
  • Spouse A and B have community assets of $200,000.

In this fact scenario, Spouse A is the only one filing bankruptcy. Spouse A will be the only one getting a discharge. The debts included in the bankruptcy equal $150,000. Spouse A only has $10,000 worth of separate assets that would be used to satisfy the $150,000 debt. So, the trustee will use the $200,000 community assets to satisfy the remaining $140,000 in debt even though Spouse B essentially has a $100,000 interest in the community assets. Under these facts, Spouse B’s interest in the community property has went from $100,000 to $30,000. Moreover, Spouse B’s separate unsecured $20,000 debt would not be discharged in the bankruptcy. Therefore, it would be in the best interest of Spouse A and Spouse B to file a joint case.

This post only provides cursory information relating to a joint case. There are many more factors to consider when determining whether to file jointly or individually. Contact our offices today to speak with an experienced attorney at Joe Frick Law. We are here to help you with this complex matter.