Can I File Bankruptcy Without My Spouse?

Frequently clients need to file for bankruptcy, but want to do so without his or her spouse being affected.  That raises the questions: Can a married person file bankruptcy alone? How is the non-filing spouse impacted when their spouse files bankruptcy alone?

A person in a marriage can file bankruptcy without the spouse. While there may be advantages to filing alone, there may be disadvantages in some circumstances as well.  Here are a couple of things to consider.

Information From the Non-Filing Spouse May Be Needed

It most instances, income information regarding the non-filing spouse is necessary to file the bankruptcy petition.  Many clients initially are concerned that this means the non-filing spouse is “affected”.  That’s not the case.  Under the bankruptcy rules, the married spouses are in effect considered a single economic unit, so the financial information is simply necessary to determine qualification.  The debts and credit of the non-filing spouse should nevertheless remain in tact.

Advantages of Filing Bankruptcy Without Spouse

Some clients chose to have only one person in marriage file for bankruptcy to help preserve the credit of the non-filing spouse.  This can be useful when the couple wants or needs to qualify for a loan or to improve interest rates on future loans.  Filing alone may also be helpful when one spouse owns non-exempt property separately and the couple wants to keep the non-exempt property.  Filing individually can also sometimes dissuade the trustee from seeking liquidation of jointly held non-exempt property as well because it may be difficult or practically impossible for the trustee to liquidate non-exempt property.

Disadvantages of Filing Bankruptcy Without Spouse

It should go without saying that only the debts of the spouse filing will be discharged.  If the non-filing spouse is a joint debtor on any of the debts or has individual debts, they will remain liable for the debt and it may be advisable to file jointly to maximize the benefits in filing bankruptcy.   Some bankruptcy trustees are also concerned about one spouse filing bankruptcy and claiming that the non-filing spouse owns all the property.  This could lead to a more thorough investigation or verification of property ownership.

A married person can file bankruptcy individually without his or her spouse. Advantages include preserving the non-filing spouse’s credit, while disadvantages include no discharge of non-filing spouse’s debts.   As mentioned previously, deciding to file bankruptcy without one’s spouse should be done with care and with the help of an experienced bankruptcy attorney.

Russell B. Weekes is an experienced bankruptcy attorney in Draper, Utah.  This article only provides a broad generalization and is not intended to provide legal advice for any specific circumstance.  To schedule a free bankruptcy evaluation in Draper, call 801-657-5074 or complete our web form today!

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