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Bankruptcy Q&A - Should both spouses file bankruptcy

Should both spouses file bankruptcy?

May 1, 2012

Most of the time both spouses file jointly (there is only one filing fee) because it is the better thing for them to do. The main reason that both spouses file together is that they have joint debts and/or they each have debts. If only one spouse files bankruptcy, the other spouse remains liable for his/her individual debts and the entire balances of the joint debts (not just one-half) and the creditors can continue to pursue the non-filing spouse to pay those joint debts despite the filing of the bankruptcy by the other spouse

In a chapter 13 bankruptcy the nonfiling spouse is protected during the bankruptcy from being pursued by the creditors of some joint debts. However, when the bankruptcy is over and if the joint debt was not paid in full through the chapter 13 plan, the creditor may look to the nonfiling spouse for payment of the unpaid balance.

On occasion, however, it is wise for only one spouse to file. This may be because the non-filing spouse owns valuable property that would be lost in a bankruptcy or owes very little or no debt or because the spouses will not qualify for a particular chapter of bankruptcy if both file. This can be complicated but can be clearly explained to you by our attorneys.

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