Does A Non-Filing Spouse Retain Privacy Of Personal Financial Information?

An experienced bankruptcy attorney called me to discuss the following issue in a Chapter 7 bankruptcy filed by a married man. The debtor's wife did not join in the petition. The spouses were recently married. The debtor husband acquired his assets and incurred his debts prior to his marriage. The spouses filed separate income tax returns. The debtor listed his current income and his estimate of his wife's income on his bankruptcy schedules. The debtor's family income was above Florida median income so the debtor had to qualify under the means test for Chapter 7 bankruptcy. The U.S. Trustee challenged the debtor's qualification under the means test, and the Trustee demanded that the non-filing spouse document her income and produce her tax returns. . The wife refused on grounds of confidentiality and privacy. She asserted that the U. S. Trustee had no right to look at her personal financial information because she was not involved in her husband's bankruptcy. The U.S. Trustee threatened to challenge the bankruptcy unless the non-filing wife complied with the request for financial information.

I am not aware of any court decision dealing with the privacy rights of a non-filing spouse where the spouse's income is an issue in the means test of the debtor spouse. Although all family income is relevant to the means test it seems that a non-filing spouse does not forfeit rights of privacy because her spouse chooses to file bankruptcy. I would be interested if any reader knows of a court decisions dealing with this issue.

posted by Jonathan Alper, bankruptcy and asset protection attorney, Orlando, Florida