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Does My Spouse Have To File Bankruptcy Too?

Sometimes married couples take out loans in only one spouse’s name. This might be because one spouse has better credit, or one spouse stays at home and has no income to show on a loan application, or there may be other financially strategic reasons to incur debt in one spouse’s name only. So what do you do when your spouse holds all the debt, and your family is suddenly unable to make the payments? Bankruptcy is a good option, but the question might arise as to whether both spouses should file, or only one? The answer to this question is important for all types of family structures, not just those where all of the debt is in one person’s name.

When a bankruptcy is filed you do have the option to file without your spouse if you are married. Doing so can have some of the following results:

  • The non-filing spouse will be in better position, at least in the days and months immediately following the filing, to obtain extensions of credit if you need to take out a new loan.
  • Any funds held in the name of your spouse only should not be subject to seizure by the trustee or a creditor.
  • If you own a home jointly with your spouse, even if you are not financially obligated to pay for the home, your interest in the home will be impacted by the bankruptcy. This means if suitable arrangements are not made for the repayment of the home, your ownership interest can still be lost.

Another situation to consider is one where most, but not all of the debt, is in the name of one spouse only or there are only a few loans that have been taken out in both spouse’s names. It might seem like a good idea to file bankruptcy without your spouse if this is your arrangement, because you may be thinking it would be nice to keep some credit available for your family’s needs. But, if you do this, the debt that is joint between you and your spouse will still have to be paid by your spouse. Even if you have a small amount of joint debt, filing bankruptcy without your spouse can put him or her in the position of being solely responsible for the debt. So while it might seem like an attractive option to file a case on your own under certain circumstances, unless there is a compelling reason to do, so your better bet is to file a joint bankruptcy case. For help deciding what is best for your family, call us today.

For more information about how to handle overwhelming debt for yourself and your spouse, contact us at We will help by coming up with solutions that work for you.

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