We will name the spouse that is filing bankruptcy the “debtor”. Only the debtor’s assets are relevant and must be included on the bankruptcy petition and not the non filing spouse’s assets. For example, if the non filing spouse owns 100% of a vehicle, the asset need not be included on the petition. However, if the debtor has any interest in any property, the property must be listed on the petition.
This means that if any assets are jointly owned, the asset must be included on the petition. In the event that a debtor owns 50% of any real estate or personal property, and the property is included on the petition, the trustee and the court will determine the value of the asset to the bankruptcy estate based on the debtor’s 50% interest, only.
On occasion, there may be issues as to whether real estate or property that is titled only in the name of the non filing spouse, is considered owned by both spouses, including the debtor. For example, a bankruptcy trustee may take the position that a house titled in the name of the non filing spouse, only, is, in fact, owned 50% by the debtor, because the house was purchased with both of their funds, equally, and they pay the mortgage equally with both of their funds. Also, if the debtor files during the divorce process, the debtor may be entitled to certain marital property that is not titled in the debtor’s name.
Please call New Jersey Attorney Robert Manchel, whose practice is limited to bankruptcy, to discuss your options for bankruptcy protection at (866) 503-5655.