Every time I contemplate severing a joint bankruptcy case, the traditional Anglican wedding service echoes:
Those whom God has joined together, let no one put asunder.
Then I excuse myself, since it was either the attorney or the debtors that elected a joint case, not the Almighty.
And I proceed to make two bankruptcy cases where there appeared before to be only one.
Why divide spouses
Severing a joint case is one of those seldom used, but really handy, bankruptcy skills.
Divorce is most often the driving force. Two people who no longer want to be married may not want the discharge of their debts to be dependent on the other’s contribution to a Chapter 13 plan.
I used it once where information about one spouse’s debts came to the surface after the Chapter 13 was filed. They no longer qualified for Chapter 13, and I didn’t want to squander both spouses’ right to a discharge in one case.
So, we deconsolidated, converted one spouse to 7, and dismissed the other’s case, to be refiled later.
Joint cases recapitulated
Let’s go over the rules that got us here in the first place.
Only spouses may file a joint case.
(a) A joint case under a chapter of this title is commenced by the filing with the bankruptcy court of a single petition under such chapter by an individual that may be a debtor under such chapter and such individual’s spouse….(b) After the commencement of a joint case, the court shall determine the extent, if any, to which the debtors’ estates shall be consolidated.
- Will all pleadings in the joint case be treated as filed in the newly numbered case?
- Will amended schedules for the now severed spouses be required?
- How will plan payments made to date be treated?
The trustee or the court clerk may be a resource for resolving some of these questions.