Many people wonder if it is possible to file for bankruptcy without their spouse being part of the bankruptcy. This article will answer this question.
There are several key things to consider when filing for bankruptcy if you are married
First, a married person can either file bankruptcy along with his/her spouse or file individually. Usually, married couples file together when they have joint debts. However, one spouse can file by him/herself if desired. If both spouses want to file for bankruptcy, it is best to file jointly. This way, you pay only one filing fee and one attorney fee.
If preventing a bankruptcy from appearing on your spouse’s credit report is important, then you may consider filing individually.
Second, if there are joint debt(s) (i.e. debt(s) in both spouse’s name(s)), and only one spouse files for bankruptcy, then the creditor is not barred from pursuing payment, or collecting the debt from the non-filing spouse.
Third, the issue of income of the non-filing spouse is just as important as the income of the filing spouse. Provided both spouses live in the same home, both incomes count. This will be determined by the Means Test. The Means Test does two things: 1) it determines the individual’s eligibility for Chapter 7; and 2) if he or she is not eligible for Chapter 7, the Means Test establishes what they may be required to pay back to their creditors in Chapter 13.
If the total income falls below the median income level in the state where the bankruptcy is filed, then Chapter 7 is an option
This would eliminate completely eliminate all debt that is not reaffirmed. If the total income is above the median income level in the state where the bankruptcy is filed, then the only bankruptcy option is Chapter 13. This requires repayment of some or all the debt over a period of up to five years.
Several other factors that you and your attorney will discuss to determine whether or not to file jointly include:
- the amount of property you own
- the type and amount of joint debts
- the exemption laws of the state in which you file.
Since filing for bankruptcy individually can still have consequences for your spouse, it is very important to meet with a qualified attorney to make sure you are making the correct choice for the both of you.