Why do you need my spouse information when they aren’t filing bankruptcy with me?

In a marital property state like Wisconsin, even if your spouse is not joining you in a Chapter 7 or a Chapter 13  bankruptcy, their financial information is still required. This is because Wisconsin's marital property laws treat most debts and assets acquired during the marriage as shared property, regardless of whose name they are under. Including your spouse’s income, debts, and assets allows the court and trustee to get an accurate picture of your household’s financial situation.

Here’s why it matters:

1. Income Calculation: In Chapter 7, household income is used to determine your eligibility for bankruptcy through the "means test." Even if only one spouse files, the combined income affects this calculation.

2. Household Expenses: The court considers total household expenses to understand how much money is available for debt repayment. Including your spouse’s finances helps establish a complete picture of these expenses.

3. Asset Assessment: Wisconsin’s marital property laws mean that assets (and sometimes debts) are treated as jointly owned, impacting which assets may be exempt or non-exempt in the bankruptcy process.

Providing your spouse’s information helps ensure transparency and accuracy in your filing, reducing the risk of issues or delays in your case.

If you fail to accurately disclose your spouse's information in a Chapter 7 bankruptcy, it can lead to serious consequences, including:

Dismissal of Your Case: Inaccurate or incomplete information can result in your case being dismissed by the court, meaning you would not receive the debt relief you’re seeking.

1. Denial of Discharge: The court may deny your bankruptcy discharge, preventing you from wiping out eligible debts. This would mean you remain liable for all of your debts even after going through the filing process.

2. Accusations of Bankruptcy Fraud: Intentionally omitting or misrepresenting information, including your spouse’s income or assets, can be seen as fraud. This is a serious offense that can result in legal consequences, including fines and, in extreme cases, criminal charges.

3. Impact on Future Bankruptcy Filings: If your case is dismissed for failure to disclose information accurately, it can complicate any future bankruptcy attempts. Courts may view subsequent filings more critically.

4. Trustee Actions: The bankruptcy trustee may investigate further and take additional actions, such as seizing assets or requiring additional documentation, if they suspect information is incomplete or inaccurate.

To avoid these consequences, it’s essential to be transparent and thorough in your disclosures. Accurately reporting your household’s full financial picture, even if your spouse is not filing, helps ensure a smoother and more successful bankruptcy process.