I need to file bankruptcy, but what if I’m married?

Commonly asked questions of married individuals needing to file bankruptcy:

Do married couples have to file bankruptcy together? If you are married there are three options for filing bankruptcy: 1) file together, 2) file alone, or 3) both file separately. There are several factors to consider when deciding if you should file jointly or alone. The biggest factors being how are the debts split between you, how much does each of you make, and who owns the property.

What about joint and co-signed debts?  When a debt is joint or co-signed, both spouses owe 100% of the debt.  It makes no difference what name comes first or who the debt was actually for. If your name is on the bill, you owe the whole thing.  If you file joint tax returns then you both owe the tax debt.

Does my spouse’s income affect my bankruptcy?  Even if you file for bankruptcy by yourself, the court will want to know about all the money that comes into the household.  You will need proof of your income and your spouse’s income for the past 6 (six) months.  Regardless of your situation, your attorney will have to put you through a test to see if you qualify for the Chapter 7 or the Chapter 13 bankruptcy.  Your attorney will ask you for pay stubs or information about your spouse’s income, even if they don’t plan to file bankruptcy with you.

What about the things we own together? Whether you file bankruptcy together or by yourself, you get to keep a certain amount of property, household goods and things called “exempt property”.  Don’t worry, you are not going to lose everything. No one wants to make you start all over again with nothing, so the law allows you to keep the majority of the property and goods you have now.  Exempt property is the property that is protected, that you get to keep after filing bankruptcy.  Your lawyer will go through what you own with you and let you know what you can keep and what is not exempt.  This is one reason why you should speak with a bankruptcy attorney sooner rather than later.  If you or your spouse have property that isn’t protected or exempt, then it is important to find out early, while you still have time to make the proper decisions.  Only the property of the person filing bankruptcy goes into the bankruptcy.  Depending on the type of property, you may get more protection by filing together, or you may need to file by yourself.  Make sure you talk to an attorney to verify that the property will be protected and exempt.

Here are a couple of other blogs on this topic that you may also want to review:

Will my bankruptcy affect my spouse’s credit report?

Three questions to ask about filing together