It is important, when facing a possible bankruptcy that a debtor takes all of their assets into consideration. This is why it is always best to file a bankruptcy through a reputable bankruptcy attorney in Chicago and to utilize the knowledge and skills to avoid losing any more than you have to.
A marriage contract and the type of agreement that is signed can play a large role in determining what is considered to be part of the debtor’s assets. This is particularly important in some states which are community property states. Illinois is not a community property state but if you file for bankruptcy it is always wise to understand the difference between property that is jointly owned and separately owned, as it can be an important factor when filing for bankruptcy.
- Joint Property is all property that is not listed as separate property under state law.
- Separate Property can be property that is owned by one partner before the marriage, as well as any inheritance that was acquired at any time during the marriage. It can also be any monies received during a law suit.
How Does This Affect Bankruptcy In Chicago?
When a debtor files for bankruptcy without their spouse, the separate property cannot be listed as part of the bankruptcy estate.
It is always wise to keep finances separate during a marriage, especially if they are an inheritance or gift that is given to one spouse. If the amount is deposited into a joint bank account it can be extremely difficult to prove that it should be listed as separate property. Facing bankruptcy does not have to mean that everything will be included in the estate. After the estate has been divided, the law states that all of the debtors separate property and at least 50% of the joint property will form part of the bankruptcy estate. A bankruptcy attorney in Chicago will be able to advise you on the difference between community property and separate property and how they can affect bankruptcy filing.