A spouse is generally considered separated when the two of you are living in separate households with the intent to end the marriage, even if no divorce paperwork has been filed yet. Physical separation is the key factor. Simply arguing, spending more time apart, or “taking space” does not meet the bankruptcy standard. The court looks for clear evidence that each spouse maintains their own residence and finances. This includes things like different addresses, separate bank accounts, a split in bill payments, and no longer functioning as a single economic unit.
This distinction matters because the bankruptcy system requires filers to report all household income. If you are still living together (even if you consider the marriage over), you and your spouse are still treated as one financial household. That means both incomes must be included in the income calculations required to file for bankruptcy. On the other hand, once you are truly separated and living apart, you are only responsible for reporting your income and the income of anyone in your new household.
Incorrectly categorizing your marital and household status can cause significant issues in your case. Over- or under-reporting income may lead the trustee to question the accuracy of your filing, require amendments, or even jeopardize your discharge. Being honest and precise about your living situation helps to make sure that your case is processed smoothly and protects you from unnecessary delays.
At LifeBack Law, it is very important to us to guide clients through these details every day and help them understand how their marital status impacts their bankruptcy options. If you’re not sure whether your situation counts as “separated” for bankruptcy purposes, our team can help you make the right determination and keep your case on solid footing! When the time is right, or when you are ready, reach out to Minnesota’s MOST Kind and Helpful bankruptcy law firm by going now to www.lifebacklaw.com. You will be so happy you did.