When a couple has joint accounts, both spouses are not required to file bankruptcy—one spouse can still file for bankruptcy as an individual. The non-filing spouse may still benefit from speaking with a bankruptcy attorney.
All community income, assets and liabilities need to be listed in the bankruptcy even if only one spouse filed bankruptcy.
When you decided to become jointly liable for a debt, you agreed to be liable for the debt on your own in the event your spouse’s liability is extinguished. Creditors are not allowed to contact your spouse about the debt once the bankruptcy process has begun, but they can still collect from you since you are now the sole party liable for the debt.
In Chapter 13 on the other hand, co-debtors are protected from collection while the Chapter 13 case is pending. After the bankruptcy case is over, and if all of the creditors have not been paid, then the creditors can go after the non-filing spouse for recovery of any unpaid balances.
In general, if you are filing an individual bankruptcy in an attempt to emerge from bankruptcy with a set of credit scores unscathed, you will only succeed if the accounts are individual accounts. If any debt is shared debt, you are going to have to pay it anyway. A bankruptcy attorney can tell you how to protect an non-filing spouse in the event of a spouse’s filing.
So, usually its a better idea to file together. But, there are some circumstances where it does make sense for one spouse to file bankruptcy while the other spouse does not.
Over the past 31 years, the Law Offices of Christopher A. Benson has helped over 2,500 of Washington clients take control of their financial situation. We can stop your garnishment and change your monthly payments for all your combined unsecured debt, and if you have had more than $600 garnished within the last 90 days, we can get all of the money back in most cases. But you have to act quickly–call (253) 815-6940 for your free consultation, or email us today.