Hundreds of thousands of Americans file for bankruptcy each year. Most personal bankruptcy cases are filed by individuals or couples who are married. However, not all married couples can agree on whether they should file for bankruptcy. If you’re married and facing significant debt, do not be embarrassed. Also, don’t be misinformed. Working with experienced Glendale bankruptcy lawyers at Perez Law Group, PLLC can help to ensure that you and your spouse both protect your interests as you seek financial solutions.

Can you file for bankruptcy without your spouse? The short answer is “yes.” You can file for bankruptcy separately in the same manner that you would file for taxes separately. Whether it is advantageous to file for Chapter 7 or 13 bankruptcy individually – or as a couple filing jointly (again, just like taxes) – depends on your unique financial hardships both jointly and separately. In some marriages, both partners have excessive debt and are struggling financially. In other marriages, only one spouse shoulders excessive debt.

When Is Filing For Bankruptcy Without A Spouse Beneficial?

Your Spouse Has Already Filed For Bankruptcy

Has your spouse filed for a Chapter 7 or 13 bankruptcy before? If so, you will need to consider any applicable waiting period before your spouse can file again. In Chapter 7 bankruptcies, you must wait a minimum of eight years to file again. If you or your spouse has filed for bankruptcy in the last eight years, you’ll want to speak with our firm about when you may be able to benefit from a discharge of debt under either the Chapter 7 or Chapter 13 process. On the contrary, if your spouse filed for Chapter 13 bankruptcy before, they may only have to wait two years before they can file for bankruptcy with you. The two-to-eight-year waiting period does not apply if your spouse didn’t receive a discharge on their initial debt or their case was dismissed.

Your Spouse Prefers To Avoid Filing Jointly

Although you are married, your spouse may have personal reasons why they would rather keep their name off the filing. If your spouse does not wish to file for bankruptcy and they will not budge in this assertion, you will need to file for bankruptcy separately if you want to benefit from this legal and financial resource.

Your Spouse Does Not Have A Lot Of Debt

Unless your spouse has a significant amount of debt, more than likely, it is not beneficial to file for you to file for Chapter 7 or 13 bankruptcy jointly. Bankruptcy will negatively impact your spouse’s credit score. You and your spouse may have personal goals that will be hindered by a drop in credit.

Consider this: you and your spouse want to buy a new home. A bank will not loan you the money because both of you have low credit scores as a result of filing for bankruptcy jointly.  Suppose you want to take out a business loan, but you can’t get a lender to agree to the loan because of your low credit score. However, a lender does agree to loan the money to your spouse because their credit score remains unaffected due to you filing for bankruptcy separately.

Your Spouse Will Receive An Inheritance, Gift, Or Settlement Money Soon

Regardless of whether you live in a community property or equitable distribution state, certain property is going to be considered your spouse’s separate property (unless you sign a prenup or postnup stating otherwise) by the state. Your spouse’s inheritance and personal injury settlement money is theirs. Additionally, any gift that your spouse receives is their personal asset. Although these things are not yours to claim, should you file for Chapter 7 bankruptcy jointly, bankruptcy law stipulates that a creditor may recover what they’re owed via the sale of your spouse’s nonexempt property.

In a Chapter 7 bankruptcy, this means that the trustee assigned to your case may sell your spouse’s nonexempt items to recoup the debt. In a Chapter 13 bankruptcy, you and your spouse may be required to pay your creditor an amount equal to the value of the nonexempt items. Therefore, if you know your spouse will receive any of the above within six months of the bankruptcy filing, they should probably try to postpone receipt of the item or not file for bankruptcy with you jointly.

Will Your Jointly-Owned Properties And Income Be Affected?

Arizona is a community property state. In community property states, whatever you and your spouse accumulate during your marriage is classified as jointly-owned property. Whatever you two accumulated before your marriage is separately-owned property. The nature of whether your property is separately or jointly owned can change if you two signed a prenuptial or postnuptial contract outlining a different arrangement. Thus, your spouse’s property can be on the hook if they acquired it during your marriage and you owe creditors.

Perez Law Group, PLLC Offers Client-Focused Bankruptcy Services in Glendale, AZ

The decision to file for bankruptcy without your spouse is not a decision you should make without seeking the legal advice of a lawyer you trust. Perez Law Group, PLLC is an award-winning law firm consisting of reputable bankruptcy attorneys. Our attorneys will make it their mission to protect your assets, advise you of your best options, and stick with you throughout your bankruptcy case. Contact us online today or call 602-730-7100 to get started. We look forward to hearing from you.