The simple answer is no. Only one spouse has to file for personal bankruptcy. However, there are a number of qualifications to this rule. First, if you are considering filing bankruptcy alone in order to conceal the high salary of your spouse, stop right there. As a married bankruptcy petitioner, you will be required to disclose your spouse’s salary and your total household income.
Whether or not you decide to file jointly depends upon your situation. Do you hold your debt jointly or separately? For example, if the majority of your debt is on credit cards in your name only, it might be best if you file for bankruptcy on your own. Your bankruptcy will not harm the credit of your spouse. However, if you have joint accounts and only one spouse files for bankruptcy, the non-filing spouse will still be responsible for the debts at the end of the bankruptcy process.
There is an exception to this rule, however. Chapter 13 bankruptcy’s co-debtor stay protects individual co-debtors from collection activities. This only applies to consumer debts, not debts incurred from a business, taxes, or lawsuit. And remember, the automatic stay only protects the co-debtor until the end of the agreed-upon Chapter 13 payment plan. Upon the debtor’s completion of his or her Chapter 13 plan, if there are still outstanding debts, the co-debtor can be held responsible for those.
In some cases, you may not care if your spouse is liable for joint debts—for example, if you are going through a divorce, you may only want the discharge for yourself.
Every bankruptcy case is different, and an experienced bankruptcy lawyer can help point you in the right direction. Harold Shepley & Associates is a full service debt relief law firm and can answer any questions you may have about bankruptcy. Contact us today for a free consultation.
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