If You Are Married Can You File Bankruptcy Individually?
One common question bankruptcy lawyers hear is this: If you are married, can you file bankruptcy individually? The simple answer is yes. The difficult part is determining whether an individual or a joint bankruptcy filing makes the most sense.
To speak with a lawyer about your options for filing bankruptcy and whether you should file bankruptcy individually or with your spouse, please complete this form.
Individual Vs. Joint Bankruptcy Filings
As a lawyer can advise, there are many factors married people should consider when thinking about bankruptcy:
- State laws: Property laws vary from state to state. Anyone considering bankruptcy should first learn whether his or her state follows community property or equitable distribution laws. In community property states, certain debts and assets are considered jointly owned by both spouses - meaning if one spouse files solo, the other may still be on the hook. In equitable distribution states, debts and assets are generally owned by the spouse who earned or incurred them.
- Type of debt: Debts that are owned by both spouses (i.e. those for which both spouses' names are on the contract) and those owned by only one spouse may be treated differently in the bankruptcy court. If one spouse has a jointly owned debt discharged, the other spouse may be responsible for paying it. Depending on state laws, individual bankruptcy filings may make more sense when the filing spouse has mostly singly owned debt.
- Debt liability: Another consideration is whether the non-filing spouse cosigned any loans for the filing spouse. If one person files for bankruptcy singly, any debts that the spouse cosigned become the non-filing spouse's responsibility.
- Income level: Chapter 7 bankruptcy requires filers to pass a means test based primarily on income and a spouse's income will be considered in calculations even when filing individually.
Joint Vs. Single Bankruptcy
The process of deciding whether to file for bankruptcy individually or jointly is complicated and requires a thorough understanding of state laws. If you're ready to get help determining which filing method would make most sense for you and your spouse, don't hesitate to speak with a bankruptcy lawyer today.