Many of our clients are married, and they often wonder, "Do we both have to file for bankruptcy together, or can just one of us file for bankruptcy and protect the credit rating of the person that is not filing for bankruptcy?"
The good news is that married people have several choices:
They can both file together as part of the same bankruptcy case.
Only one of them can file for bankruptcy.
The person who does not file for bankruptcy can still file for bankruptcy at a later date if that person needs to file a bankruptcy at a future date. Therefore, if your spouse files for bankruptcy today, and you need to file a bankruptcy on your own at some time in the future, you are certainly allowed to file bankruptcy for yourself when you choose to do so.
If both a husband and wife each have a lot of debts, it might be a good strategic and financial move for them to file bankruptcy together. Our office charges the same fee for a married couple to file together, or if just one of them files on their own. If both people have a lot of debts, why file for two different bankruptcies and pay for two different bankruptcies, when you can legally wipe out all of the debts together in one joint case, and it doesn't cost you any more money to do so?
Another question we often get from married people is, "If one of us files for bankruptcy, will it affect the credit score of my spouse?"
The answer is that "if your spouse has not co signed for any of your debts, then your bankruptcy should not have any impact at all on your spouse's credit score." It's a good idea, however, to check your spouse's credit report after you have filed for bankruptcy. The credit bureau could easily make a mistake and somehow incorrectly list a bankruptcy for your spouse, when no such thing ever happened. Mistakes do occur, and that's why you ought to check your spouse's credit report about 60 days after you filed for bankruptcy. Any mistakes made on your spouse's credit report should be quickly corrected once you bring those mistakes to the attention of the appropriate credit bureau.
Here's another interesting point. You and your spouse could be living in separate residences, and maybe even going through a divorce.
But get this, as long as you are still legally married, you should be able to file together in the same case, and you can split payment of the attorney fee between the two of you. A caveat to these statements is that if the two of you are totally adversarial (like you hate each other's guts) and you have totally different financial interests, this might constitute a conflict of interest, so its doubtful that the same attorney would be legally able to represent both of you.
I once took a seminar entitled "Divorce and Bankruptcy, the Worst of Both Worlds". If you're getting divorced and filing a bankruptcy at the same time, things could get a little sketchy, and it might be a good idea that each of you speak to separate bankruptcy lawyers, since there could easily be a conflict of interest if the same lawyer were to handle a joint bankruptcy for both of you.
Here's one final point to consider. It may be hard to understand why, but this is the rule: When only one spouse files for bankruptcy, we still have to disclose and consider the income and expenses for the other spouse. This rule can sometimes mess up a potential bankruptcy case because the other spouse (who is not filing for bankruptcy) makes too much money based on the bankruptcy rules.
This can get a little complicated, and we won't get into all of it right here, other than to say that if you are married, and you and only you are filing for bankruptcy, we will still have to disclose your spouse's income and expenses to the bankruptcy court, and those figures might very well have an impact on how your bankruptcy is going to work out. Obviously, if you are going to become one of our clients and this sort of thing pertains to you, we will explain all of the pertinent rules to you in full detail so that you can understand how this all of this will apply to your case.
DISCLAIMER: We set forth herein results that many people can obtain through a successful bankruptcy. This does not mean, however, that every client can obtain all of the results listed. Every client's case is individually analyzed on its own merits, and if you retain our office to represent you, we will advise you what results we believe we can achieve for you.