When you get married, your finances become closely intertwined with the finances of your spouse. If you are considering filing for bankruptcy in the Washington DC area, you may wonder: Does my spouse have to file bankruptcy, too?
The answer to this question is not a simple one. There are situations when it makes sense for your spouse to file for bankruptcy. But there are also cases where it is actually much better if only one spouse files for bankruptcy protection.
Debt shared by both spouses: file together
If you and your spouse have shared debt, only one of you may elect to file for bankruptcy. But the non-filing spouse will then become solely responsible for the outstanding debt. When you co-sign for loans or have credit cards in both of your names, you are jointly responsible for those debts. But you are also both individually responsible as well.
A bankruptcy filing by only one spouse means that the creditor may not longer attempt collection against that particular spouse. The creditor may still, however, collect 100 percent of the debt from the other spouse. The non-filing spouse, in short, is still obligated to pay. A bankruptcy filing by one spouse in a couple that has mostly shared debt helps only the filing spouse.
Debt owed by only one spouse: file separately
On the other hand, if the bulk of the debt is in your name only and you want to get rid of your individual debt rather than get rid of marital or shared debt, then it may make sense for just one spouse to file for bankruptcy protection. If none of the debt is owed by the non-filing spouse, then that spouse need not file. The Bankruptcy Code does not require married couples to file bankruptcy together.
There are also a few other situations where it makes sense for only one spouse to file. For example, if you maintain separate households, you may pass the means test only if you file individually. Likewise, if one spouse has a recent bankruptcy that prevents another filing, then filing separately may be the only option.
Assets are important, too
Whether to file bankruptcy individually or jointly depends also upon your assets. If you have valuable individual or shared marital property, those assets can complicate the calculus on whether to file jointly or individually. Always discuss your options with an experienced bankruptcy attorney before you make any decisions.
Does my spouse have to file bankruptcy, too?
The best and only way to determine whether both you and your spouse should file bankruptcy is to speak with a qualified and experienced bankruptcy attorney. Your lawyer will evaluate your specific financial situation.