A Spouse's Responsibility in Bankruptcy
Nothing requires you and your spouse to file bankruptcy together. You can file even if your spouse doesn't agree with your decision. Even if you file separately, your spouse will have to provide the court with information. Your spouse may also end up responsible for your joint debts if you secure a bankruptcy discharge for yourself.
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Joint or Alone
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When you file for bankruptcy, the court will require you submit a complete financial picture: assets, income, expenses, creditors and debts. Even if you're filing alone, your spouse will have to provide the same information about her finances. As long as you have access to your spouse's money, attorney Alexander Korotkin says on his website Rochester Debt Relief, the judge may take that money into account when determining how much of your debts you're able to repay.
Joint Debts
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Being married doesn't make your spouse responsible for your debts. If it's your name alone on the auto loan or the credit card, your creditor has no claim against your spouse. If both your names are on the mortgage, or your spouse has a second credit card on your account, your creditors can still hold your spouse responsible after you get off the hook. Joint tax returns are a special case: The IRS can hold your spouse responsible for the taxes due on your income if you fail to pay.
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Property
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In Chapter 7 bankruptcy, the court can take your assets and property to pay off your creditors before granting you a discharge. If you own property jointly with your spouse, the court doesn't have to divide your assets up; the court trustee can seize and sell the entire property, unless it's protected by your state's law. In a community property state, however, your bankruptcy can also protect your property, according to the Moran Law Group. After your debts are discharged, any asset you own jointly with your spouse is protected from your spouse's creditors.
State Law
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State law may affect which debts your spouse is responsible for. North Carolina, for instance, holds you and your spouse jointly responsible for each other's individual medical debts, if you were married and living in the state at the time you incurred them. If you're filing Chapter 7, each state protects certain property from sale, which may reduce your spouse's responsibility. If you file jointly, the value of the property exemptions may be increased.
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