Will my spouse be affected if I file bankruptcy?

People are often worried that if they file for bankruptcy it will affect their spouse.  Whether this will happen depends on one key question:

          Does your spouse also owe the debt?  Or, did your spouse co-sign for your debt?

If the answer is no, there is no problem.  Your spouse does not have to pay the debt just because you filed bankruptcy.

If the answer is yes, there could be a problem.

If your spouse is the joint owner or co-signer on the debt, the creditor can still pursue your spouse to pay the debt even if you file bankruptcy.  This is true even if your spouse never used the credit card.

There are two possible ways to handle this problem.

First, your spouse might consider filing bankruptcy with you.  A joint filing is possible for married couples.  Our firm charges an additional $400 fee for joint filings.

Secondly, if your spouse is jointly responsible for the debt, you can often keep paying the monthly payments even though the debt is on the bankruptcy.  If the creditor sees the monthly payments are being made on time, they will not pursue your spouse just because you filed bankruptcy.  They might stop your spouse from using the credit card, but they are not going to penalize your spouse if you keep up the monthly payments.

If the debt your spouse co-owns is a small part of your overall debt, paying the monthly payments might be a good solution to the problem.  But, if it is the main or only debt, this means that you will have to continue paying the debt that is your main reason for filing bankruptcy in the first place, and so it may make more sense to pursue a joint bankruptcy filing.