Hands Of Two Women In OfficeThere are a lot of reasons why your bank accounts may be in multiple names. The most common reason is sharing a joint account with your spouse, but your name may also be on an account with an elderly parent or adult child. While all of these circumstances are extremely normal and provide flexibility and convenience, they can represent an added layer of complication if you or the other person find yourself in financial jeopardy and facing a bankruptcy.

The good news is that generally speaking, ownership of a joint account belongs to the person who put the money there. Unfortunately, that does not eliminate the complexities of getting your money if you aren’t the person filing for bankruptcy. The joint account will likely be listed as an asset, and the co-owner of the account will need to provide documentation to the trustee regarding money that does not belong to the debtor. This process is likely to be time-consuming, so if you have a shared bank account and are considering filing for bankruptcy, it may be a good idea to set up a separate individual account for the other account holder to keep their funds separate. Note that it is essential that your documentation of the source of funds is in order, and none of the debtor’s monies are put into the solvent party’s account.

Filing for bankruptcy is a complicated event under the best circumstances, and when you are married or share accounts with another person it can become even more so. Beyond shared bank accounts, there are also issues regarding shared property that isn’t exempt and which can be sold for distribution of proceeds to creditors. For those who file for Chapter 7 or Chapter 13 jointly with their spouse, all the property that you own is part of the case, whether you own it together or separately, and so are all of your debts. There are advantages to filing jointly: for example, you will be able to double the number of your exemptions, but it still may make sense for the debtor spouse to file alone in order to keep your spouse’s property out of the case.

Bankruptcy is an emotionally challenging, financially confusing event that can affect every aspect of your life. To get through the process with the fewest number of complications possible and to get the answers to all of your questions, contact our office today to set up an appointment.

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