Recently on our bankruptcy forum a user asked, “I just got married and I have a substantial amount of credit card debt, unsecured personal loans, and medical debts. Can I file Chapter 7 bankruptcy without my spouse and have these debts discharged?”
Spouses may file Chapter 7 or Chapter 13 bankruptcy with or without their spouse. Assuming all of the joint debts are paid, you may even be able to file bankruptcy without jeopardizing your spouse’s credit.
Why would I file without my spouse?
The first question you have to ask if you are considering filing without your spouse is whether or not it is a good idea. There are a variety of reasons you may file without your spouse including the following:
- Your spouse does not want to file bankruptcy. The most common reason a spouse files independently is because their spouse does not want to file bankruptcy.
- One spouse owns all of the debt. In some cases, debts are only owed by one spouse and the other spouse has no debts.
- Joint filing for Chapter 7 is not allowed because the couple’s income is too high. If you decide to file without your spouse the court will still consider your spouse’s income to the extent it “contributed to the household expenses of the debtor or debtor’s dependents,” but not all of their income is considered. This may allow one spouse to file Chapter 7 independently of the other spouse.
- To protect the assets of one spouse. In some cases one spouse has valuable assets which they own and do not want sold in Chapter 7 bankruptcy.
Chapter 7 and my household income
Whether or not you can file Chapter 7 bankruptcy, however, will depend on several factors. For instance, although you can file bankruptcy without your spouse’s cooperation, you may not be able to file Chapter 7 if your household income, which includes your income and your spouse’s income, is below a certain limit.
Chapter 7 bankruptcy laws were updated in 2005, making it more difficult for high income earners to have their debts discharged through Chapter 7. The bankruptcy courts assume that if you and your husband are living together that both of you are also paying for household expenses. With this in mind, they will consider both your income and your spouse’s income when reviewing income limits.
If, however, you decide to file on your own without your spouse, the courts will still consider your spouse’s income, but they will not consider ALL of their income. In this instance, there is a chance that if you decide to file without your spouse you may qualify for Chapter 7 bankruptcy, which might not be possible if both you and your spouse decided to file together.
The first step if you are considering filing bankruptcy without your spouse is to talk to a bankruptcy lawyer and find out if your spouse’s income and contributions are too high and they eliminate your ability to file Chapter 7.
What debts are discharged if I file without my spouse?
If you decide to file Chapter 7 bankruptcy you may eliminate your obligation to pay debts which are owned jointly with your spouse and those which are separate from your spouse (assuming they are dischargeable).
Filing bankruptcy alone, however, does not eliminate your spouse’s obligation to continue to pay for debts which are owned jointly.
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