While married couples are bound together by the vows they take, when it comes to filing bankruptcy, things are viewed a little differently. Can one spouse file bankruptcy without their partner? Or is it better to file bankruptcy together?

First off, yes, you can file bankruptcy either as an individual or with your partner. But the path you and your partner decide to take will depend heavily on your financial situation.

Your Options for Filing Bankruptcy as a Married Couple

Perhaps the biggest decision you and your spouse must make after deciding to file for bankruptcy is to either file together or separately. One option for you and your spouse is to jointly file a single bankruptcy petition for two people. Doing so only requires one filing fee, instead of two, so upfront it will already cost you less. Furthermore, you and your spouse will also both benefit from the “automatic stay” issued against your creditors once you file your petition. This will prevent creditors from attempting to collect from both you and your spouse. Once the bankruptcy is finalized, filing together means any debt you and your spouse hold jointly can be fully discharged.

In contrast, bankruptcy laws also allow one or both spouses to file separate bankruptcy petitions. But if only one spouse files, then only that spouse will receive the “automatic stay” and ultimately end up discharging their debt. That means that the other spouse will still be financially liable to pay back any debts held jointly.

In making the decision to file bankruptcy alone or together with your spouse will depend on the following considerations:

How Will Bankruptcy Affect Your Credit Scores?

Filing for bankruptcy will negatively affect your credit score for some time after the bankruptcy is complete. So, if both you and your spouse file together, then ultimately both of your credit scores will take a hit. This may mean that you and your spouse will have trouble buying a home, car, or even starting a business for several years.

Because of this, if you and your spouse plan to do anything of those above things in the near future, then it may be better to file bankruptcy alone. Only having the more indebted spouse file will allow the other spouse to retain a decent credit score. In fact, that spouse can even help the filing spouse improve their credit by co-signing on new credit cards and debts.

Before your decide to file alone or jointly, check your credit scores and figure out how the bankruptcy will affect your future endeavors. If you choose to only have one spouse file, then it is vital that the non-filing spouse constantly checks their credit report. This is to ensure that their spouse’s bankruptcy has not affected their score.

Can Bankruptcy Threaten Your Spouse’s Assets?

Another key consideration you and your spouse need to make is to determine which assets belong in which partner’s name. This is critical because Chapter 7 bankruptcy requires selling off assets in order to pay back creditors. If you file bankruptcy alone, then only the assets in your name will be sold off. So if you hold assets in your name that you and your spouse both wish to keep, then only having your spouse fie bankruptcy can in essence protect those assets.

How Will Bankruptcy Affect Your Jointly-Held Debts?

How much debt you and your spouse hold separately and jointly is another thing to consider. Debt incurred in your name is your sole responsibility. Debt incurred in your spouse’s name is their responsibility. Just because you are married, doesn’t mean that your debts are transferred to each other. So, if your spouse holds a lot of debt in their name, then it may make more sense for only them to file bankruptcy.

However, jointly-held debt, such as a mortgage acquired during the marriage, is both spouses responsibilities. So if you and your spouse hold a lot of jointly-held debt, then only having one spouse file bankruptcy will mean the other spouse is now responsible for the entire debt. In these cases, it may just be better to file bankruptcy together.

For Help Deciding Whether to File Bankruptcy Alone or Together

Can one spouse file bankruptcy? Yes, but the question should actually be, should only one spouse file bankruptcy? An experienced North Charleston bankruptcy attorney at Steadman Law Firm, P.A. can help you understand your options. Contact us today to learn more.