Does filing for bankruptcy impact your spouse?

| Feb 21, 2020 | chapter 11, chapter 13, chapter 7 | 0 comments

You and your spouse may have slightly diverging opinions when it comes to finances, which may have led to the two of you taking an unconventional approach to things like bank accounts and property ownership. A job loss or a series of poor financial decisions may bring you to bankruptcy’s doorstep. Can your filing impact your spouse? 

HowStuffWorks has some insights that can answer your questions. Understand how to protect your spouse, his/her finances and your marriage. 

Shared accounts 

Any accounts that you share with your spouse are on the table when you file for bankruptcy, and the same applies to loans that your wife or husband may have co-signed on. In terms of shared loans and debts, when you file for bankruptcy, you no longer bear responsibility for paying qualifying loans and debts back. The same is not true of your non-filing spouse, though, as s/he remains on the hook for repayment. 

Credit report  

While a bankruptcy filing shows up on your credit report, you do not have to worry about it showing up on your spouse’s report. 

Real estate property  

In regards to property, any real estate that your non-filing spouse owns on her or his own remains off the table for bankruptcy. That said, you should check with a legal professional to determine whether you still have to list that property on your bankruptcy disclosure. This is so the bankruptcy trustee can see that the property is separate rather than shared. 

You and your spouse should have an open and honest conversation about bankruptcy, no matter if only one of you wants to file. Bringing in a legal professional into the conversation is a good idea.