A fellow bankruptcy attorney recently asked me this question in the context of a Chapter 13 bankruptcy.  He had filed the case for the husband alone pursuant to 11 U.S.C. § 301 , and due to changed circumstances decided that it would be a good idea to make the case a joint case pursuant to § 302.  He wanted to know if it was sufficient to simply amend the Voluntary Petition to add the wife.

It may surprise you to learn that the answer is, “No.”  While there is a way to accomplish the desired goal, it’s a bit more complicated than simply amending the Voluntary Petition.

I.          Amending The Voluntary Petition

Rule 1009(a) of the Federal Rules of Bankruptcy Procedure (“Fed. R. Bankr. Proc.”) provides:

A voluntary petition, list, schedule, or statement may be amended by the debtor as a matter of course at any time before the case is closed.

Thus, my colleague’s Chapter 13 client could amend his Voluntary Petition to, for example, change his address, at any time up to the closing of the case – which for most Chapter 13 cases is five years after the filing date.  If he could amend the Voluntary Petition to change his address, why couldn’t he amend to add his wife as a co-filer?

II.        Comparing Sections 301 And 302

Individual cases, regardless of chapter, are filed under § 301(a):

A voluntary case under a chapter of this title is commenced by the filing with the bankruptcy court of a petition under such chapter by an entity that may be a debtor under such chapter.

The somewhat stilted use of the phrase, “by an entity that may be a debtor under such chapter,” appears because a business can file under § 301(a).  However, if the debtor is not a business, then the entity in question is one individual.  Section 301(a) cannot be used by a married couple.  Why?  The answer is found in § 302(a):

A joint case under a chapter of this title is commenced by the filing with the bankruptcy court of a single petition under such chapter by an individual that may be a debtor under such chapter and such individual’s spouse.

Thus, an individual case must be filed under § 301(a), while a joint case must be filed under § 302(a).  Therefore, since the original case in question was filed under § 301(a), it cannot be changed into a § 302(a) by merely adding the spouse to the Voluntary Petition.

But isn’t this just a mindless adherence to rules?  After all, who would be hurt if the debtor just added his wife’s name to the Voluntary Petition?

III.     Reasons In The Case Law For Prohibiting This Type Of Amendment

The courts that have analyzed the plain language of § 302(a) have uniformly concluded:

Nothing in section 302 suggests that a debtor may amend a petition to add a spouse as a debtor and thereby retroactively commence a case for that spouse. For that reason it is not surprising that in every reported case dealing with such an amendment, the motion to amend was denied.

In re Clinton, 166 B.R. 195, 96 (Bankr. N.D. Ga. 1994).

One reason courts have refused to apply an overly broad construction to Fed. R. Bankr. Proc. § 1009(a), and have instead denied this type of amendment, is because permitting such an amendment might prejudice the rights of creditors:

The possibility of prejudice to creditors obviously exists.  The caption of a petition tells creditors who the debtor is and isn’t, thereby imparting to creditors critical information on which they may choose to act or not to act.  Adding a spouse as a debtor may in some cases result in delay and confusion, particularly if a significant amount of time has passed from the initial filing. Adding the spouse as a debtor could adversely affect a creditor’s strategy to collect the debt. Entities extending credit to a non-debtor might have a different attitude if they knew the leopard could change his spots. . . . No one would seriously argue that the rule would permit an amendment to substitute a new and different debtor. The identity of the debtor and the debtor’s estate obviously cannot be a moving target that leaves trustees and creditors guessing whether an amendment may retroactively invoke the automatic stay to protect a totally different entity than the one identified in the original petition.

Id. at 197 – 98.

Moreover, there is no clear authority to permit such an amendment.  Indeed, the authority is against such an amendment.  As the Ninth Circuit Bankruptcy Appellate Panel (“BAP”) held:

Olson argues that she should thereafter be allowed to amend her petition so as to commence a joint case with her spouse under Bankruptcy Code § 302(a). 11 U.S.C. § 302(a).  Such joint cases are to be commenced by the filing of a “single petition” by an individual and that individual’s spouse. 11 U.S.C. § 302(a). Thereafter, the court is to determine the extent to which the estates are to be consolidated. 11 U.S.C. § 302(b).  There is, by rule of procedure, a general right to amend a voluntary petition “as a matter of course at any time before the case is closed.” Fed. R. Bankr. P. 1009(a).  The question becomes whether such an amendment to a voluntary petition satisfies the “single petition” requirement of § 302.  We conclude that it does not.  In holding that a Rule 1009(a) amendment cannot be used to commence a joint case under § 302(a), we join in an impressive body of trial court decisions from other circuits.

In re Olson, 253 B.R. 73, 74-75 (B.A.P. 9th Cir. 2000) (emphasis added).

Furthermore, granting a motion to add a spouse in this manner raises serious questions as to the appropriate filing date:

T]he filing date of the bankruptcy petition is of fundamental importance to the case since a number of rights, obligations, and deadlines are determined by that date. This includes such matters as the property included in the bankruptcy estate; the debts to be discharged; the scheduling of a creditors’ meeting under § 341(a); the imposition of the automatic stay; the deadlines for filing dischargeability, lien avoidance, and preference avoidance complaints; and the time for assuming or rejecting executory contracts. . . . [T]he granting of a motion to add a spouse in this manner raises serious questions as to the appropriate filing date.

In re Sobin, 99 B.R. 483, 484 (Bankr. M.D. Fla. 1989).

IV.       The Correct Way To Achieve The Goal Of A Joint Petition

Obviously, the best way to avoid this problem is to file a joint petition in the first place.  However, that observation is cold comfort to the debtor who wants to add his spouse belatedly.  In that case the Ninth Circuit BAP provides the correct way to remedy the problem:

We note that there is a straightforward procedure for permitting belated bankruptcy relief to a non-filing spouse. That individual is free to commence a voluntary case and then seek joint administration of the two related cases involving husband and wife as provided by Federal Rule of Bankruptcy Procedure 1015(b)(1).

In re Olson, 253 B.R. at 75.

Thus, the spouse who didn’t originally file must file her own Chapter 13 case.  Once that case is filed the couple can file a motion to consolidate the two cases pursuant to Fed. R. Bankr. Proc. 1015(b)(1):

If . . . two . . . petitions are pending in the same court by or against . . . a husband and wife, . . . the court may order a joint administration of the estates. Prior to entering an order the court shall give consideration to protecting creditors of different estates against potential conflicts of interest. An order directing joint administration of individual cases of a husband and wife shall, if one spouse has elected the exemptions under § 522(b)(2) of the Code and the other has elected the exemptions under § 522(b)(3), fix a reasonable time within which either may amend the election so that both shall have elected the same exemptions. The order shall notify the debtors that unless they elect the same exemptions within the time fixed by the court, they will be deemed to have elected the exemptions provided by § 522(b)(2).

If you are a debtor who filed as an individual, and now want to add your spouse to the case, contact a good bankruptcy attorney to help you.  Don’t try to do it on your own, as you may end up doing irreparable harm to your rights.