We will occasionally meet potential clients who are married and are struggling with the idea of filing bankruptcy. It doesn't take long for one of them to ask if they can file without the spouse, and how does that work.
The spouse does not have to file bankruptcy and it does not affect them directly. There is no requirement that the spouse of someone who files for bankruptcy also has to file. There is no listing on the credit report of the non-filing spouse that a bankruptcy has been filed.
Bankruptcy law requires the attorney to gather the income information of the entire household, including the spouse, which means the pay stubs or other income information of the non-filing spouse are required so the Court can understand how much income is coming into the household. The non-filing spouse’s expenses are also recorded as the Court also wants to know the total amount of household expenses.
What situations would involve one spouse filing and not the other? One common scenario is when couples marry after one spouses has already accumulated significant debt, such as in a divorce situation. If one party has $25,000 in credit card debt and the other has little debt, why would the spouse with very little debt file bankruptcy?
The non-filing spouse may have some debt, not a large amount, and the filing spouse has a lot of debt. They may have determined that it is necessary for one of the spouses to continue to have excellent credit because of a pending necessary purchase or house repair. In this situation, it may be better for only one spouse to file for relief.
Sometimes one spouse simply doesn’t want the other spouse to find out about the debt that has been run up. Finances are often a major cause of marital relationships that are less than perfect and I always recommend that spouses speak to each other.
Filing for bankruptcy is a decision that should be entered into with consideration whether both spouses need to do it. Sometimes, it may not be necessary