If you file for bankruptcy, individually, your spouse is not required to file with you, and they will not be personally liable for your debts. However, there are some important ways that your spouse could still be affected.
If you and your spouse share debts, such as joint credit cards, loans, mortgages, the creditor can still seek payment from your spouse even if you’re the one filing for bankruptcy. Bankruptcy only discharges your portion of the debt; your spouse remains responsible for the joint debts. If your spouse co-signed for any loans, such as a car loan or mortgage, they may be required to continue paying the loan after your bankruptcy. The bankruptcy discharge would not affect their liability on those debts.
In a joint bankruptcy filing, both spouses file for bankruptcy together and list their debts, assets, and income. This option is available whether you’re filing for Chapter 7 or Chapter 13.
When you file jointly, all joint debts are included in bankruptcy, and the discharge of those debts applies to both of you. This means that both spouses can eliminate their liability for joint debts, such as shared credit cards, medical bills, and other loans. Both spouses will receive a discharge of eligible debts which can offer a fresh financial start for both.
Key Points to Remember: If you file for bankruptcy individually, your spouse will not be responsible for your individual debts, but they could still be affected by joint debts or co-signed loans. Filing jointly can help both spouses discharge joint debts and get a fresh start, but it will also impact both of your credit scores. The impact on property and income varies depending on whether you file individually or jointly, and which type of bankruptcy you file for.
If you and your spouse are considering bankruptcy, it’s important to consult with a bankruptcy attorney who can provide guidance tailored to your specific circumstances, including how to protect both of your financial interests.
If you have any questions about the topic discussed in this article, or any bankruptcy law matter, please give us a call at Bononi & Company 724-832-2499.