If My Spouse and I Are Separated, Should We File Bankruptcy Together?

If you have debt problems, and if you are the higher earning partner in a marriage that is about to end, the answer to the question is posed above is almost certainly a resounding “yes.”  Your divorce case will be much simpler if you can avoid a family court dispute over who is responsible for paying which debts.  If your spouse is willing, filing bankruptcy before your divorce is final, even if you’re separated, could be a smart move.

The nightmare scenario to avoid is having the family court order you, as the higher wage earner, to pay all the marital debts in order to protect your soon-to-be ex-spouse.  The family court might even award higher child support or spousal maintenance to your spouse based upon that spouse’s debts.  This can be avoided if both of you file a bankruptcy, preferably under chapter 7, before your divorce is final.

It is also likely that “passing” the chapter 7 means test will be easier if you are living separately in two households, due to the higher living expenses which a separated couple will typically experience.