Occasionally, I’ll get a married client who has decided to file bankruptcy alone, without his or her spouse. Sometimes, this is a joint decision. If one spouse has taken on the lion’s share of the debt in the relationship, then it might not make sense for both to file. Sometimes, the filing spouse is unable to convince the non-filing spouse to file bankruptcy. I’m not a marriage counselor, so I don’t get into the deeper significance of a couple having polar opposite positions on a subject as significant as bankruptcy.
But I do go into the legal ramifications of only one spouse filing. One of the biggest issues is the matter of joint debts. All of the filing spouse’s creditors, including those the spouse is just a co-signer on, will get notice of the bankruptcy. What this means is that the creditor will consider the account, both for the spouse and the non-filing spouse, as in bankruptcy. Typically, the creditor will no longer accept automatic payments and will no longer send out monthly statements. It will be up to the non-filing spouse to contact the lender to make regular payments.
Second, while the joint debt will be discharged as far as the filing spouse is concerned, the non-filing spouse will still be on the hook for the debt. If he or she defaults, the lender can go after her or him and sue to collect any money owed or repossess any property that might be securing the property.
Filing alone is possible. The question is whether or not it’s a good idea. Couples should think long and hard about this decision and consult a bankruptcy attorney to discuss all of the possible consequences.
