Does a Wife Have to File for Bankruptcy If Her Husband Does?
Filing for bankruptcy can be a frustrating and confusing prospect. When only one spouse wishes to file, bankruptcy becomes an even more tangled affair. While it's legal and possible for one spouse to file bankruptcy without the other filing, whether or not this is a good idea will depend on your debts and the state you live in.
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Debts in Your Name Only
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Generally, it's easier for one spouse to file for bankruptcy without the other filing if the debts the spouse wishes to discharge are in his name only. Debts that were incurred in the husband's name before the marriage, or debts incurred on accounts that are not jointly held, can be included in a bankruptcy without affecting the wife.
Don't assume, however, that just because debts were incurred in only one spouse's name that the other spouse cannot be held liable. In the case of credit cards where one spouse is the card holder and the other is on the card as an "authorized user," it may mean going to court to prove that the authorized user is not liable for the debt.
Joint Debt
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It gets trickier for one spouse to file bankruptcy when debts are held jointly. When one spouse files bankruptcy, such as the husband, and joint debts such as a mortgage, a car payment, or other debts exist, the spouse who does not file is often held completely liable for the debts.
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Community Property States
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If you live in a state that recognizes community property laws, it is possible for one spouse to file bankruptcy without the other, but it is also more likely that debtors will sue the non-filing spouse for the debts, even debts that are not held in the non-filing spouse's name.
States that recognize community property law are Arizona, California, New Mexico, Nevada, Idaho and Washington, as well as Texas, Wisconsin and Louisiana. Alaska also recognizes community property law if the spouses opted to have all marital property considered community property.
Individual Situations
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In the case of one spouse wishing to file bankruptcy without the other, Bankrate's Justin Harelik recommends consulting a bankruptcy attorney before filing in order to understand how your state's laws and your situation can affect the spouse who does not wish to file.
"Whether to file alone or jointly with your spouse depends on some of the following factors, your local bankruptcy jurisdiction, family law issues, the condition of your marriage, the nature of the debts, the source of your income and other miscellaneous issues," Harelik says.
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