Should My Spouse File Bankruptcy With Me?

12 Jul Should My Spouse File Bankruptcy With Me?

You might be wondering if filing bankruptcy without your spouse is a good idea. The answer depends on whether your spouse has significant debts to discharge in a bankruptcy, and whether your spouse is responsible for the debts you intend to discharge in your case.

If you live a community property state, generally your spouse is liable for the debts you have incurred during your marriage. Otherwise, your spouse is liable for your debt only if he or she has signed, or cosigned, an agreement to pay the debt. For most persons, a spouse has significants debts which can be discharged in a bankruptcy. This means it will only cost you money to file a bankruptcy case without your spouse.

If you file bankruptcy without your spouse, any debts that are joint debts will have to be paid in order to protect the non-filing spouse from lawsuits. Additionally, the benefit to be gained from filing alone will likely be negligible.

It is unlikely that your ability to obtain credit in the future will be assisted in any meaningful way by filing alone. This because the spouse who does not join in the bankruptcy will still have debts, and this will count against the spouse in future efforts to obtain credit. The spouse who does file bankruptcy will have no debts, and consequently may end up with a better chance of re-establishing a good credit history than the spouse who has kept his or her debt load.

All things considered, it usually is better to file bankruptcy with your spouse rather than alone.

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Craig W. Andresen is a consumer bankruptcy lawyer in Bloomington, Minnesota, with 22 years’ experience in consumer and small business bankruptcy cases. He is the Minnesota chair of the National Association of Consumer Bankruptcy Attorneys, and is a member of the Minnesota State Bar Association’s Bankruptcy Section. Mr. Andresen lectures often on the topic of consumer bankruptcy at local and national legal seminars.
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