Can One Spouse File For Bankruptcy?
This is an important question, and the answer is Yes. One person in a marriage can file for bankruptcy, obtaining the powerful advantages of the automatic stay.
If you file for bankruptcy, it does not mean your partner is bankrupt, too. The other party does not benefit from the automatic stay or the discharge of debt. The other person can choose not to file or to file at a later date.
Yes, Just One Spouse Can File For Bankruptcy
Marriage by itself does not make both spouses personally liable for a specific debt. Who owes what depends on who signs the loan agreement or credit application. So if one of you buys a car, the other does not have to pay for it if you are unable to make payments.
Likewise, the two people in a marriage have separate credit ratings. What one partner does should not affect the other’s rating.
When Assets Are Jointly Held
At the same time, many debts in a marriage are jointly held. If you file income taxes jointly, then both of you are “on the hook” for paying the tax. If the couple jointly owns assets, a creditor may elect to go after the assets of the nonbankrupt partner.
There are many different scenarios that can occur when one partner in a marriage files for bankruptcy, including joint bankruptcy. We have an open door policy at McBride Law Firm — if you have a question about bankruptcy, one of our lawyers will make time to talk to you. Or, call us at 318-625-0471.