Do we both have to file for Bankruptcy?

The question of whether both spouses have to file for bankruptcy comes up fairly often.  The simple answer under the law is no, no one who does not wish to file for bankruptcy can be forced to voluntarily file for bankruptcy.  But the real answer is more complicated.

Let’s start with why you would not want both spouses to file.

The first reason might be that one spouse has previously filed and is not eligible to file, or not eligible to receive a discharge at the present time.  A second reason might be that the non-filing spouse has good credit and so the couple wants to preserve their short term ability to access credit in the name of the non-filing spouse.  A third reason might be moral objections or reputational concerns for the non-filing spouse.  Any of these may be reasons why someone would not wish to file at the same time as their spouse.

Now let’s turn to the good reasons that most couples eventually decide to file together if they can.

First, one of the greatest benefits of bankruptcy is cessation of creditor calls, collection harassment, and threats of repossessions or foreclosures.  Depending on how credit is arranged, and whether you live in a community property state, one spouse filing may not serve this purpose under Chapter 7.  Chapter 13 offers a “co-debtor” stay so Chapter 13 will prevent these problems from recurring after only one spouse files.

Second, most spouses carry credit cards from the account of the other.  If they do, and if the cards have been used, the non-filing spouse may wind up stuck with the bill, which will not be discharged in the bankruptcy of the filing spouse.

Third, spouses only need to pay one filing fee when they file, so they both get a fresh start in bankruptcy for the price of one case.

Of course, this decision is a weighty one and each case is different.  The advice of a  Bankruptcy specialist is the best aid to making the decision about whether both spouses should file.

This article is written by an attorney at Attorney Donald Wyatt PC. Always consult an attorney before making any legal decisions. To make an appointment today, please click here to contact us.

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