If your debts only belong to you and do not involve your spouse in any way, it is possible to file a bankruptcy only for yourself without including your spouse. The option to file independently from your spouse will allow your family to preserve your spouse’s credit record separately by filing an individual bankruptcy. Filing independently can also be a strategy for your family to preserve one spouse’s credit while the other who is dealing with debt issues can file for bankruptcy and immediately begin to improve their own credit record resulting in building a strong credit record for the household. We can now take a look at the details on how filing individually will impact the household.
The credit impact of a married individual filing for bankruptcy can be completely isolated from the spouse who is not included in the bankruptcy. If you file individually without your spouse, the credit impact of the bankruptcy will only be reported on the social security number in the bankruptcy which will be yours only and not your spouses. Although joint accounts may be affected, only the individual credit record will be impacted in the case of an individual bankruptcy filing. The bankruptcy court will know via your bankruptcy petition that you are married, but filing individually. In this case, they will also need to know your household income.
Household income will be factored as the amount of money you make every month even if you are filing an individual bankruptcy. The court will consider your spouse’s income along with yours to qualify you for a Chapter 7 bankruptcy because the bankruptcy court only considers the total household combined income in a filing involving a married individual. If you meet the income threshold for the size of your household, you can qualify for Chapter 7 and discharge your debts through bankruptcy.
A joint bankruptcy filing is where both spouses are included in the bankruptcy. This is necessary when debts that need to be discharged in bankruptcy have shared ownership between spouses. If you have joint debt, a joint bankruptcy should be considered. If you have joint debt, it is still possible to file individual bankruptcies to preserve one spouse’s credit, but any joint debt liability that the bankruptcy filer is discharged from will still be left to the other spouse not included in the bankruptcy and can be collected upon.
If you and your spouse is considering a bankruptcy for one of you, consult your local bankruptcy attorney to see if an individual bankruptcy or a joint bankruptcy will work best for you. You will need to carefully review all of your debt bearing accounts to make sure that the division of the debt is clear if you would like to successfully file a bankruptcy to rid of one spouse’s debts without impacting the other spouse.
Bankruptcy Law Professionals is a law firm based in Southern California. Our Orange County and Riverside bankruptcy attorneys can help you with a free consultation by phone or in-person today. Contact us at 855 257-7671 to set up your consultation.
