Can Only the Husband File Bankruptcy?
Bankruptcy is a big financial move with long-reaching consequences and sometimes scary aftereffects. While combining households does not necessarily mean combining debt, one spouse's bankruptcy will most likely affect the other spouse. So, it is possible for one half of a married couple to file without the other partner, just not without at least some sort of consequences for both parties.
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Single Debt
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Marriage alone doesn't combine debt, which is held only between the debtor and the creditor. Only the partner who created the debt and agreed to its terms is responsible for repayments. When only one partner files for bankruptcy, the debts held solely by that partner are discharged or restructured. Nevertheless, it's important to be aware that even if your partner created the debts, some debts potentially affect the nonfiling spouse; for example, debts that resulted in tax or property liens can be held against both partners. If you have these types of debts, discuss them with your bankruptcy attorney since the discharge of these debts can potentially affect the nonfiler's credit.
Community Property
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In certain states, jointly held property can be used to satisfy creditors. This means that if you own a house jointly with your spouse, the entire house becomes part of the bankruptcy estate. Each state with a community property clause interprets this in a different way. Some states hold only community property acquired after marriage as a part of the bankruptcy estate, others include all community property. A single spouse filing bankruptcy in a community property state can have far reaching consequences for his spouse.
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Liens
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As mentioned earlier, debts that have resulted in liens against community property or taxes can potentially be discharged if the filing spouse was the one who accumulated them. Unfortunately, this results in both parties being affected, since the discharged lien shows up on the credit report of both property owners, making a single filing bankruptcy more complicated for both parties.
Credit
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A bankruptcy filed by one spouse does not show on the other spouse's credit report, even if the bankruptcy was filed after marriage. This does not mean that a bankruptcy will have no impact on the other spouse's credit, since liens against jointly held property and joint debts are recorded. Bankruptcy can severely damage your credit score, so while it is possible for only one spouse to create a bankruptcy filing, both parties should discuss the consequences with an attorney.
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