Thousands of married couples file for bankruptcy each year. But if you and your partner are struggling with debt, you likely have many questions. How will bankruptcy affect my spouse? Can one spouse file bankruptcy without the other?
The short answer is yes, you can file bankruptcy without your spouse. But before you make that decision, it’s important to understand your filing options, as well as the pros and cons of filing an individual vs a joint bankruptcy petition. An experienced Middletown OH bankruptcy lawyer at Andrade Law Office LLC can help.
What Are the Options for Married Couples Filing Bankruptcy?
Married couples can file bankruptcy either separately or jointly. When determining which path to take, you should first consider how filing bankruptcy impacts your debts, credit scores, assets, and other aspects of your financial circumstances.
When to File Jointly
If you both have significant debts, filing jointly allows you both to benefit from debt relief. You can also save money, since you only have to pay a single filing fee for the one bankruptcy petition.
Another advantage is that you both benefit from the automatic stay, which puts a stop to creditor actions, including foreclosure proceedings. This can give you time while you work to settle your debts.
One con to filing jointly, however, is that you both of your credit scores will take a hit. Since a bankruptcy remains on your credit for ten years, it may leave you both in a precarious position if you plan to buy a home or obtain a loan in the near future.
When to File Separately
If one spouse holds a majority of unsecured debt, it’s best to file separately. The filing spouse’s debt can be discharged through the bankruptcy, offering some financial breathing room. And it allows the non-filing spouse to preserve a relatively decent credit score.
It’s important to remember that in Chapter 7 bankruptcy, secured assets may be sold off to settle debts. So if one spouse has extensive assets only in their name, such as a car or home, those assets are not placed at risk if the other spouse files separately. However, the non-filing spouse could still be liable for a portion of the debt if it is a joint account.
Can One Spouse File Bankruptcy? Ask a Bankruptcy Lawyer
The decision to file bankruptcy is a weighty one, and best made with the help of an experienced bankruptcy attorney. At Andrade Law Office LLC, we can help you fully understand your options. Contact us today to learn more.
