Can I file bankruptcy without my spouse?

It is possible to file for individual Chapter 7 bankruptcy without your spouse in Arizona, but there are a number of factors to be considered before you make that choice. With Chapter 7 bankruptcy the household income of BOTH spouses is used in the qualifying Means Test, even if you file bankruptcy without your spouse. Experienced bankruptcy attorneys should be consulted for legal advice for separate bankruptcy filings.

Separating Debts in Bankruptcy Without my Spouse

Throughout the United States, if debts were acquired in both names, then bankruptcy without your spouse does not relieve the non-filing spouse of the obligation to pay. All of the persons that signed the contract are legally responsible for that debt. In a community property state like Arizona, most debts incurred during the course of marriage are presumed to be obligations of the marital community (both husband and wife) no matter who signed the documents. The good news is that the discharge of an individual debtor also discharges the community from the debt in most cases.

Property Used in Debt Repayment

During a bankruptcy, different types of property may be handled differently: property that was owned jointly before the bankruptcy filing, property that was acquired after the bankruptcy filing, or property that was acquired by the non-filing spouse through gift or inheritance. The ownership of property that could be used to repay debts should be reviewed with an experienced bankruptcy attorney.

The Non-filing Spouse is Affected

The non-filing spouse may be protected from creditor collection and harassment during the repayment period. Credit reports and future credit worthiness of both spouses will most likely be affected, depending on how the debts are discharged. Filing for joint credit in the future will be affected. The effect on the non-filing spouse will be less with a Chapter 13 bankruptcy where joint debts are to be partially or fully repaid.

When filing for bankruptcy without your spouse, the consequences for you and for your non-filing spouse must be carefully considered.