Filing For Bankruptcy Without My Spouse: Will It Affect Them?

what happens when One Spouse Files For Bankruptcy?

There are different reasons you may need to file bankruptcy on your own. Maybe your spouse is not legally obligated, or they just refuse to file. Maybe you don’t want to wreck your credit, or they don’t want you to ruin theirs.

Regardless of the reason, you can consider bankruptcy on your own if you have a high income but are behind in debt payments and can no longer afford help from someone else.

In this article, a Gilbert bankruptcy lawyer will explain if filing for bankruptcy on your own can affect your spouse.

Does Filing For Bankruptcy Affect My Spouse’s Credit?

The short answer is no. People have separate credit bureau files attached to their social security number regardless of their marital status. Therefore, if the spouse isn’t a co-debtor or legally liable for the same debt, the bankruptcy shouldn’t affect their credit score.

Nevertheless, if you and your spouse have joint debts, you may have to worry about a negative report on your spouse’s credit score, especially if they’re a non-filing co-debtor.

When a spouse files for A Chapter 7 bankruptcy to release the joint debt, it may appear on the spouse’s credit report too. Therefore, the creditor can take action against the non-filing spouse.

Moreover, creditors are always notified about the spouse’s bankruptcy status, meaning they can bother the non-filing spouse to collect joint debts.

Things change a little with a Chapter 13 bankruptcy because it has a safety clause to protect a co-debtor who doesn’t file for bankruptcy. This clause forbids creditors from bothering co-debtors. However, the creditors can still contact the court to lift the say if the joint debt isn’t repaid through a repayment plan.

Only an experienced Gilbert bankruptcy lawyer can give you the best advice about this topic.

Will We Lose Our Jobs After Filing For Bankruptcy?

Neither you nor your spouse will lose your jobs after filing for bankruptcy.

Bankruptcy laws deny employers from hiring either spouse because of bankruptcy. Besides, many employers don’t even realize there’s a filing for bankruptcy. If they find out, be relieved that they know you are getting a better financial outcome.

In short, you don’t have to worry about losing your job when starting this process. Your spouse should also be relieved.

What Will Happen To Our Property?

Bankruptcy won’t affect any property the non-filing spouse has on their own. But, if you have joint assets, the bankruptcy case will affect them depending on the state.

There are some differences between a common-law property state and a community property state. In the case of a common-law property state, all individual assets and the spouse’s share of interests in jointly owned properties are part of the bankruptcy. But, properties that belong only to the non-filing spouse are usually not at risk.

With community property states, most assets and incomes during the marriage are considered community property, so they may belong to the bankruptcy estate’s property.

A Gilbert bankruptcy attorney can give you more information about what happens with the joint property if you file for bankruptcy.

Is It Better To File For Bankruptcy Together?

There’s no “one-size-fits-all” solution for this question. There’s no rigid rule that says that both spouses have to file for bankruptcy together. It all depends on each scenario and financial situation. Therefore, you can get the best analysis about it by contacting a bankruptcy lawyer.

In some cases it is better to file for bankruptcy with your spouse, but in others, it’s better to do it on your own.

There are many reasons for debt to remain in one spouse’s name in marriage. It may happen because the marriage is new, or because the spouse didn’t divulge the actual amount of debt to their partner.

Uncontrolled use of credit is another reason to consider filing for bankruptcy in one spouse’s name in marriage, especially if the spouse in debt continues to use credit without the other spouse’s knowledge.

Another reason to file for bankruptcy in only one spouse’s name is to protect the other spouse’s credit record. This is a common practice because it can benefit beaus of the non-filing spouse’s access to credit.

Is It Better To File For Bankruptcy Together?

In some cases it is better to file for bankruptcy with your spouse, but in others, it’s better to do it on your own.

A Gilbert Bankruptcy Lawyer Can Help You

Filing for bankruptcy doesn’t have to affect your spouse’s credit, but it’s always better to contact a top-rated lawyer to get the best outcome. With Gilbert Bankruptcy Lawyers, you won’t have to worry about your debts or financial issues because we can help you throughout the process. Our law firm will help you choose the best strategy to pursue depending on your goals and needs.

Gilbert Bankruptcy Lawyers
Office: 480-448-9800
Email: info@myazlawyers.com
Website: https://gilbertbankruptcylawyers.com