Bankruptcy For Spouses In Nevada


For any Las Vegas resident that is overwhelmed with debt, the protections offered through a Chapter 7 or Chapter 13 bankruptcy filing may make sense. But what about married couples? While it is true that couples frequently accumulate assets and debt together, it is not uncommon for only one spouse to be in a position to need the protection of a bankruptcy filing. Luckily, the bankruptcy code provides options for one or both spouses to declare bankruptcy using a single petition.

Known as a joint filing, it is possible for Nevada couples to file together in order to discharge both join and personal debts. However, there are a number of important caveats you should know, which is why it is always worth discussing your case with a Nevada bankruptcy attorney before filing your bankruptcy petition. To discuss your options with a Las Vegas bankruptcy lawyer you can count on, contact Vohwinkel Law today.

Bankruptcy For Spouses Or Partners – How Does It Work?

When it comes to filing bankruptcy, the decision for a single spouse to file separately or for both spouses to file jointly depends on the nature of the debt the two have accumulated. If both spouses receive a discharge, both the spouse’s individual debts as well as the debt they have taken on together will be wiped away. However, if only spouse files, the non-filing spouse will still be on the hook for an individual debt as well as the debt that was taken on jointly by the couple.

It is also important to note that the property of a non-filing spouse will still be a part of the bankruptcy estate even if they aren’t filing in their own name. This means that, despite not being a part of the bankruptcy, the non-filing spouse could find their assets liquidated and sold by the bankruptcy trustee in order to satisfy the creditors of the filing spouse. With these kinds of consequences, it is important to discuss your options with an attorney before making any decisions regarding filing for bankruptcy.

There are also circumstances where joint filing makes the most sense. With most filings, the goal is to protect as many assets as possible using the exemption process. When property is exempt, it cannot be used by the bankruptcy trustee to satisfy creditors. In a joint filing, most exemptions under Nevada law may be doubled to prevent spouses from being shortchanged compared to if they had simply filed for bankruptcy separately.

However, some exemptions like the homestead exemption can only be used once even for married couples. In a situation where one spouse has a large amount of non-exempt property, it may make more sense for the other spouse to file separately in order to make better use of the state’s available exemptions.

How Does Bankruptcy Treat Separate And Marital Property Or Debt?

Unlike most states, Nevada is a community property state. While some states differentiate between which spouse owns a specific asset that was acquired during the marriage, Nevada law tends to consider all marital assets to be owned equally between the spouses. This is true regardless of whose name the property or the debt incurred to buy the property is in. Some common examples of community property include:

This is in contrast to separate property that was owned by a single spouse prior to the marriage and is not so mixed with community property that it can no longer be identified. Upon discharge, a bankruptcy court will wipe out the individual debt owned by the filing spouse as well as that spouses’ responsibility for any community debt. However, a non-filing spouse will still be on the hook for those community debts even after the bankruptcy case is completed.

A Las Vegas Bankruptcy Attorney Can Answer Your Joint Filing Questions

Before you decide to file for bankruptcy either jointly or separately, it is worth discussing your options with an experienced bankruptcy attorney. The attorneys at Vohwinkel Law have years of experience helping Las Vegas residents obtain a fresh financial start through the bankruptcy process. Contact Vohwinkel Law today for a free consultation.

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