Can My Spouse File For Bankruptcy Without Me?
If your spouse has amassed a great amount of debt, you may be wondering if your spouse can file for bankruptcy and leave you out of it. It’s a good question. The answer is yes, but how effective this process will be depends largely on what state you are in, whether the debt is joint, and what type of bankruptcy your spouse will be filing.
First, you must consider whether you are in a community property state. In a community property state, you may still face lawsuits or judgments even if the debt is only in your spouse’s name. Most states, like Virginia, are common law states. In these states, it’s possible for one spouse to file for bankruptcy and eliminate the debts in his/her name. In these states, a creditor likely won’t be able to collect from the non-bankruptcy filing spouse as long as both spouses didn’t sign the loan papers.
Second, if the debt is joint debt, meaning both spouses signed for it and you live in a common law state, you may still be liable for the debt even if your spouse files for bankruptcy. If your spouse files a Chapter 7 bankruptcy, your debt will remain after her bankruptcy. If your spouse files a Chapter 13 bankruptcy, she may include some joint debt like credit card debt. In a Chapter 13, a repayment plan will be developed where your spouse will make monthly payments typically over 36 to 60 months. If you and your spouse use this approach to eliminate joint debts, you need to be certain that the joint debts are paid off in full during the plan. Otherwise, the creditors can come after you when the payment plan is completed.
These issues are extremely complex, and this post has only touched the surface of the many issues involved. It’s best to consult with an experienced bankruptcy attorney to determine whether it’s advantageous for you or your spouse to file for bankruptcy without the other.