It’s no secret that financial stress can damage a marriage. This is true under the best of circumstances, but the disagreements tend to be more heated when debt becomes an excessive burden.
Maybe one of you thinks bankruptcy is a good idea, while the other wants to continue along the path you’ve been traveling with debt. Not agreeing on a solution doesn’t mean one of you is right and the other is wrong. There are pros and cons to any debt solution you choose.
The key to navigating the situation successfully is understanding your options and what those options entail. Here’s what to know if you or your spouse is considering bankruptcy.
No. Married couples do not have to file bankruptcy together. One spouse can file individually, while the other spouse does not.
That does not mean the non-filing spouse’s finances can be ignored. When one spouse files, the bankruptcy case may still require information about the household’s income and expenses. The debts shared by both spouses also need careful consideration.
This is one reason you should speak with a bankruptcy attorney before deciding how to proceed. The question is not simply whether both spouses want to file. It is how filing by one spouse could affect the entire household.
Joint debts require particular attention. When both spouses are legally responsible for a debt, a bankruptcy discharge generally protects only the spouse who receives the discharge. The other spouse can remain responsible for the debt.
For example, suppose both spouses signed for a credit card or personal loan. If only one spouse files bankruptcy and receives a discharge, the creditor may still be able to pursue the non-filing spouse for the remaining obligation, subject to applicable bankruptcy protections.
This is also true for shared debt. Your bankruptcy attorney can help you determine if debts are shared or individual.
A person does not generally need the other spouse’s permission to file an individual bankruptcy case. However, filing is not something you should rush into or do behind your spouse’s back. Even if you file individually, doing so impacts your spouse because of shared debts, jointly owned property, and more.
The right approach depends on the details of your situation rather than simply on whether your spouse agrees with filing.
Can one spouse file bankruptcy without the other spouse?
Yes. A married person can generally file an individual bankruptcy case without requiring the other spouse to file.
Will my spouse’s debt be discharged if I file bankruptcy?
Generally, no. A bankruptcy discharge applies to the person who receives the discharge. Joint debts can leave the non-filing spouse responsible for the obligation.
Will my spouse’s income matter if I file alone?
It can. Household income may be relevant to the bankruptcy process even when only one spouse files. An attorney can explain how your spouse’s income and your household circumstances factor into the case.
Should married couples file bankruptcy together?
There is no single answer. Filing jointly may make sense in some circumstances, while an individual filing may be appropriate in others. The decision depends on the couple’s debts, income, assets, and other financial circumstances.
Arguing about bankruptcy can be difficult because the decision affects so many aspects of your shared life with your spouse. You could be worried about losing property, damaging credit, or taking an unnecessary step, while your spouse sees filing as an advantage because it stops collection activity and serves as a fresh start.
Speaking to an experienced bankruptcy professional helps both of you understand your options. Even if one of you remains uncertain, getting accurate information can help you have a more productive discussion about what comes next.
The Law Offices of Robert M. Geller can review your household’s financial circumstances and explain how bankruptcy could affect each spouse. If you are struggling to agree about how to handle your debt, contact our firm to discuss your situation and learn more about your options.
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