If my husband wants to file for bankruptcy, can he do so as an individual and how will his decision impact me?

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If my husband wants to file for bankruptcy, can he do so as an individual and how will his decision impact me?

I purchased my home before getting married. My name is the only name on the deed. I have good credit. Should I file for divorce in order to protect myself?

Asked on November 20, 2012 under Bankruptcy Law, Tennessee

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Yes, only one spouse can file for bankruptcy. In fact, if they are the only partner that owes debt, then only they should file. However, debts for which spouses are jointly liable will remain with the non-filing spouse.

Under Chapter 7, where one spouse’s debts are cleared, the creditor can still pursue the other spouse. In a Chapter 13, pursuant to which the debtor re-pays their debts, the creditor will leave the co-debtor alone so long as plan payments are deposited on time.

While the bankruptcy of one spouse typically does not affect the other, there are exceptions. For example, generally most of a debtor’s "non-exempt" property is taken by creditors and if that property is jointly held, it can also be taken away (so as to jointly held property only your credit may be affected). However, as to property acquired prior to marriage and solely held in the non-filing spouse's name (i.e. your house), this is considered to be their separate property and not subject to the claims of the filing spouse's creditors.

In a community property state, because both spouses own the property acquired during marriage and are responsible for all the debt incurred during the marriage. Consequently, after the community property is taken away, any property then acquired by the non-filing spouse is no longer accessible to their creditors (i.e. any joint debts discharged in the bankruptcy of an individual spouse also applies to the non-filing spouse). Therefore, from that point creditors can only go after the non-filing spouse’s separate property. 

Finally, you should be aware that unless a couple is living apart and is legally separated, in a situation where only one spouse files, the income and expenses of the non-filing spouse is required to be shown so that the court, the trustee and creditors can evaluate the income of the household. However, this in no way obligates the non-filing spouse, either legally or financially.   

eric redman / Redman Ludwig, P.C.

Answered 9 years ago | Contributor

husband can file without you.  you will not lsoe your house.  you do not owe his debts.  he does not own your property!


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