How to File Bankruptcy Separately If Married
Married people can elect to file bankruptcy jointly or separately. While most of the time it makes sense to file jointly, a situation may arise where only one spouse needs to file (for example, if one spouse has several individual debts that are not in the other spouses name). It also might make sense to file separately if one spouse separately owns valuable assets.
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Things You'll Need
- State marital property law
- List of debts and purposes for the debt
- List of how all property is owned
- Voluntary petition
Instructions
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Filing Bankruptcy Separately
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1
Itemize each of your debts and assets. Create a list that includes every piece of property you own and every debt that you or your spouse is responsible for.
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2
Check your state's laws on marital property. In a community property state, all property acquired by a spouse before the marriage is separate, and all property acquired during the marriage is jointly owned. In a common law state, property may be owned individually or jointly, depending on how you and your spouse decide to do it.
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3
If you are in a common law state, you should assign each debt and piece of property to one of the spouses. Most often, this decision has already been made, such as when one spouse obtains a separate credit card debt, or when both spouses sign a mortgage loan.
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4
Fill out the voluntary petition, and in the column titled "Name of Joint Debtor," simply type or write in "N/A." Do not include your spouse's name as a joint debtor anywhere in the bankruptcy documents that you file.
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5
Finish preparing the voluntary petition, making sure to exclude debts or property owned separately by your spouse. You must list all property and debts that are yours separately or jointly owned by you and your spouse.
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Tips & Warnings
Before deciding to file separately you should consider your state's exemption laws. Exemptions are bankruptcy rules that benefit you. For example, you can claim a homestead exemption to avoid having to sell your home. Many states allow twice the exemption amount if married couples file jointly instead of separately. Also consider joint debts. If you file separately, your spouse will still be liable for the joint debts even though the debt is discharged as to you.
If your spouse makes significantly more money than you do, consider filing jointly. It is within the bankruptcy court's discretion to dismiss your bankruptcy petition if the court decides you are abusing the bankruptcy process. It is not uncommon for bankruptcy courts to find abuse where one spouse files separately in an effort to limit exposure of the wealthier spouse.
