If my spouse files for bankruptcy, do I need to as well?
One of the most frequent questions our married clients ask is how an individual’s decision to file for bankruptcy will affect their spouse and the debts that they hold with their spouse. To answer this question, it is important to understand how courts handle debts that are jointly owned by a married couple.
Initially, it is important to dispel the common myth that married couples are automatically liable for the other’s debts. That is not the case. Typically, if the husband is filing for bankruptcy, the wife will not then be liable for all of the husband’s debts. If the husband files for bankruptcy, it should not affect the wife’s credit score. Of course, if a husband and wife both incur debt together, the situation is different. In this case, when the husband files for bankruptcy, the husband will no longer be responsible for the debt, but the wife will be entirely responsible for it. Thus, it is very important to understand the total assets and debts of each spouse before either spouse decides to file for bankruptcy.
One important factor to consider when thinking about filing for bankruptcy is the property each spouse owns. When someone files for a Chapter 7 bankruptcy, the trustee will collect all the filer’s assets and liquidate them to cover the filer’s debts. If the husband files for Chapter 7 bankruptcy, the wife’s assets will not be part of the bankruptcy estate. Couples can strategically file for bankruptcy. However, it is important that potential filers understand that the law prevents individuals from transferring assets to avoid the asset becoming part of the bankruptcy estate.
Married couples can, but do not necessarily have to, file bankruptcy jointly. When a couple files bankruptcy together, the trustee will liquidate all of the couple’s assets and use the proceeds to pay off the couple’s collective debts. This option also saves on the filing fee associated with filing for bankruptcy.
If you or your spouse is considering filing for bankruptcy, contact the dedicated Georgia bankruptcy law firm of Morgan & Morgan, P.C.
Other Frequently Asked Questions:
- Are alimony debt and payments dischargeable in bankruptcy?
- Are my student loans dischargeable in bankruptcy?
- Are tax liens dischargeable in bankruptcy?
- Can a Chapter 7 bankruptcy save my home from foreclosure?
- Can a creditor repossess my car without informing me?
- Can bankruptcy help my credit score?
- Can bankruptcy help with my income tax obligation?
- Can bankruptcy protect my workers compensation settlement funds?
- Can I discharge my old tax debt in bankruptcy?
- Can I file for social security disability while I’m still working?
- Can I keep my cellphone after I declare bankruptcy?
- Can I receive workers compensation benefits if I was injured before or after clocking out?
- Can my re-enlistment bonus be discharged in bankruptcy?
- Can student loan debt be discharged through bankruptcy?
- Can the bankruptcy trustee in my case seize the funds in my bank account?
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- How do I decide if bankruptcy is necessary?
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- I was injured at work. Can I sue my employer?
- I was terminated from my job after a work injury. Now my condition has worsened. What are my options?
- I’m considering filing a Chapter 13 bankruptcy. Do I have to include all my debts?
- I’m starting to think I may have to file for bankruptcy. Where do I start?
- If I file bankruptcy, can I keep my cars and motorcycles?
- If my spouse files for bankruptcy, do I need to as well?
- Is bankruptcy better than refinancing a mortgage to pay off debt?
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- My ex assumed our joint debts as part of our divorce settlement. Now he’s filed bankruptcy. What can I do?
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- My workers compensation doctor says I can return to work, but I can’t do the job. What can I do?
- Ripped off by a debt settlement company?
- Social security benefits — Can a creditor garnish my bank account and seize my social security funds?
- The trustee has filed a motion to dismiss my Chapter 13 case. What are my options?
- What are the consequences of filing for bankruptcy in Georgia?
- What are the most common reasons for filing for a Chapter 7 bankruptcy?
- What can I do to improve my credit score?
- What happens to your debt after you die? Will my family have to pay my debts?
- What happens when I owe more than my car is worth?
- What is the means test in a Georgia Chapter 7 bankruptcy?
- What property is exempt in a Georgia bankruptcy?
- What should I do if a creditor demands payment after I’ve filed my case?
- What to expect: First credit counseling course
- What to expect: free bankruptcy consultation
- What to expect: Second credit counseling course
- What to expect: Your next appointment
- When is my bankruptcy case closed by the court? Is it possible to reopen the case?
- Where would my bankruptcy case be filed, and where would the hearings be held?
- Will filing for bankruptcy discharge child support or spousal support obligations?
- Will filing for bankruptcy stop wage garnishments?
- Will I have to sell my primary home, rental property or vacation home if I file for bankruptcy?
- Will paying offan old debt raise my credit score?