If your spouse refuses to file bankruptcy with you, you can still file. However, there are some factors you should consider first.
Married, But Filing Bankruptcy Without Your Spouse:
Can one partner in a marriage file bankruptcy? Should one spouse file, or should the couple file jointly? If only one spouse files are the benefits and protections of bankruptcy limited? The answers to these questions can vary depending on each unique scenario. Before filing bankruptcy without your spouse, consider the laws in your state and the state of your finances. Before proceeding, it would be wise to consult a local bankruptcy attorney to get their advice on the situation. However, the simple answer is yes; one spouse can file for bankruptcy.
Is One Spouse Filing Bankruptcy Advisable?
While one spouse can file bankruptcy alone – it’s not often advisable unless their partner has little or no debt. The law does not prevent one spouse from filing while the other spouse does not file, but whether it is a wise choice or not is debatable. When you are considering filing bankruptcy without your spouse, there are several factors you should consider, including state law, the status of your finances, and how these two will engage during your bankruptcy.
When Filing Bankruptcy Without Your Spouse Could be a Good Idea:
Filing bankruptcy without your spouse may be a good idea when all the debt for a married couple is in one spouse’s name. If all the debt is associated with just one partner in a marriage, the other spouse is debt free. In this particular scenario, it could make perfect sense for the one partner in the marriage with debt associated with their name to file bankruptcy.
Reasons it May Be a Good Idea for One Spouse in a Marriage to File Bankruptcy Alone:
- Debts are in their name only
- There is a prenup agreement in place
- The married couple keeps all finances separate (and the separation of finances is clearly documented)
- The non-filing spouse is not yet eligible to file (due to a previous bankruptcy filing)
- The non-filing spouse is expecting an inheritance soon (an inheritance received within 180 days of filing bankruptcy is included in the bankruptcy estate and can be used to pay creditors)
- The couple needs to leave the option for a second bankruptcy option open for the future (the current non-filing spouse, if not included in the bankruptcy, would still be eligible to file bankruptcy later)
Benefits of Filing Bankruptcy Without Your Spouse:
In cases where the debt is only in one spouse’s name, filing without the debt-free spouse will usually protect the debt-free spouse’s credit score. There could be some ripple effects from the spouse’s bankruptcy filing, particularly if there are joint assets and the filing makes it hard or impossible to stay current on the associated debts. However, when one spouse files bankruptcy, the non-filing spouse remains liable for debts discharged in bankruptcy for the filing spouse.
If you need to discuss getting out of debt, or you need to talk about filing bankruptcy without your spouse, get in touch with Kenneth C. Rannick, P.C., Tennessee, and Georgia bankruptcy attorney. You are in good hands with Kenneth C. Rannick P.C.