Will My Bankruptcy Affect My Spouse?

Filing for bankruptcy without your spouse won't affect your spouse's debt obligations but could affect your spouse's property and more.

You won't be able to avoid involving your spouse in your bankruptcy. For instance, did you realize that filing without your spouse won't help you get around a bankruptcy qualification problem? It's true—you'll still have to report your spouse's income.

But that's not all. Filing an individual bankruptcy can also affect:

  • your spouse's credit and debts, and
  • joint and separate property.

When you finish this topic, be sure to find out some of the other things you should know about a bankruptcy filing. And check out our quick ten-question bankruptcy quiz. It can help you spot potential bankruptcy issues fast.

Will My Bankruptcy Affect My Spouse's Credit?

Typically, no. And it's fortunate because preserving one spouse's good credit for future expenditures is a sound financial strategy. It's also one of the factors married couples consider when deciding whether to file for bankruptcy jointly.

But an individual filing doesn't always work well. It's a good strategy when you don't have joint debts and when your spouse doesn't need financial relief from separate obligations.

Will Bankruptcy Affect My Spouse's Separate Debts?

No. Your bankruptcy discharge will eliminate your responsibility to pay debts. Nothing more, nothing less. A spouse will remain responsible for obligations in their name.

Will My Spouse Have to Pay Our Joint Debts After Chapter 7 Bankruptcy?

Yes. Your Chapter 7 case will wipe out your obligations. It won't erase your spouse's responsibility to repay any credit balances you took out together.

For instance, suppose the Visa card you opened jointly has a balance of $1,000 when you file for bankruptcy. After your bankruptcy, you'll owe nothing. Your spouse will owe $1,000.

Will My Spouse Have to Pay Our Joint Debts During Chapter 13 Bankruptcy?

Probably not. The Chapter 13 automatic stay stops creditors from coming after your codebtors, including a spouse. If you won't pay off the joint debt in your repayment plan, a creditor might ask the court to lift the codebtor stay. If that doesn't happen, your spouse should plan to pay any balance remaining after your Chapter 13.

Will My Chapter 7 Bankruptcy Affect My Spouse's Interest in Our Joint Property?

Yes—at least the property you own together. If you can't fully protect jointly-owned property with a bankruptcy exemption, the Chapter 7 trustee will likely sell it for the benefit of creditors.

After selling the property, the Chapter 7 trustee will return the bankruptcy exemption amount to you. But what will happen to your spouse's interest will depend on the following:

  • If you live in a common law state, your spouse will likely receive the value of the spouse's interest.
  • A spouse in a community property state won't receive half the value of your jointly-owned property. The trustee can use all nonexempt community property to pay off your debts.

Anything remaining after the trustee deducts sales costs and the trustee's fee goes to creditors.

Will My Chapter 13 Bankruptcy Affect My Spouse's Interest in Our Joint Property?

No, because Chapter 13 trustees don't sell property. However, the trustee will factor your interest in nonexempt property into your case (using the system described above), and it can drive up your monthly payment amount fast. Why? Because if you want to keep a nonexempt asset in Chapter 13, you must pay an amount equal to its value in the Chapter 13 repayment plan.

Will My Bankruptcy Affect My Spouse's Separate Property?

Probably not if you don't file together. However, this area can get tricky. A local bankruptcy lawyer will be in the best position to review your assets and formulate a strategy that will meet your needs.

Navigating Your Bankruptcy Case

Bankruptcy is an unusual area of law because it's essentially a qualification process. The laws provide instructions for completing a 50- to 60-page bankruptcy petition, and because all rules apply in every case, you can't skip a step.

The forms and resources below will help you find more information. Also, you can use this list of Chapter 7 and 13 bankruptcy forms to see where this topic falls. And this handy bankruptcy document checklist will help you gather the things you'll need to complete the petition.

More Bankruptcy Information

Bankruptcy Forms

Schedule A/B: Property

Schedule C: The Property You Claim as Exempt

Schedule D: Creditors Who Have Claims Secured by Property

Schedule E/F: Creditors Who Have Unsecured Claims

Schedule H: Your Codebtors

Related Information

What Happens to My Cosigner in Chapter 7 Bankruptcy?

What Happens to My Cosigner in Chapter 13 Bankruptcy?

How Is Joint Property Treated in Bankruptcy?

How Much Debt Should I Have to File for Bankruptcy?

Need More Info?

We want to help you find the answers you need. Go to TheBankruptcySite for more easy-to-understand bankruptcy articles, or consider buying a self-help book like The New Bankruptcy by Attorney Cara O'Neill.

We wholeheartedly encourage research and learning, but online articles can't address all bankruptcy issues or the facts of your case. The best way to protect your assets in bankruptcy is by consulting with a local bankruptcy lawyer.

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