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Filing Bankruptcy without Your Spouse
Adam Mack, J.D.
Hillary Stirling, research assistant
Maybe your spouse has good credit and you want to preserve that good credit score. Maybe you brought a lot of debt into your marriage to begin with. Maybe you're in the process of separating or have already separated and don't want to have to include your spouse. Maybe it's a point of contention between you and your spouse. All of these are reasons I've heard from client who want to file bankruptcy without their spouse. If you are married and want to file bankruptcy in Kansas without your spouse, there are several things you need to consider.
Kansas is a common-law state that applies the legal principle of equitable distribution when it comes to dividing marital property. Typically, if your name is the only one on the debt, it belongs to you. If your names are both on the debt, then you are usually assumed to both owe it. The same principle applies to assets. If your name is the only one on the title of apiece of property, it's usually considered yours alone. If your names are both on a the title, you both own half of it. PLEASE NOTE: Ownership of assets is a very complicated issue that needs to be examined on a case-by-case basis by a qualified Kansas bankruptcy attorney. Failure to consult an attorney on such a complex and critical topic could result in unintended consequences for you and your spouse. These generalizations are just that - generalizations.
When you file bankruptcy without your spouse, everything you own becomes part of the bankruptcy estate. This would include your ownership interest in any jointly-owned property, which is why ownership issues can quickly become very sticky. If you have ownership interest in a particular asset, for instance, the trustee could attempt to force the sale of that property in order to collect your 50% ownership interest. (Exemptions can help reduce the risk of a trustee taking such drastic measures.) "Ownership interest" in Kansas can even occur when the real property isn't in your name thanks to the Homestead Act and other state laws, so again, it's critical that you discuss your options with a qualified Kansas bankruptcy attorney before filing bankruptcy. Contact us today to learn more.