Can I File Bankruptcy Without My Spouse?

Are you struggling with impossible levels of debt? Bankruptcy may be the solution you need. Every year, hundreds of thousands of Americans use it to discharge enormous amounts of debt. But navigating this process is not easy, and you’ll need to make many decisions along the way that could play a role in the outcome for both you and your loved ones.

One such decision is whether to file bankruptcy alone or jointly with your spouse. The U.S. Bankruptcy Code allows you to choose either option, but one is not necessarily better than the other. Let’s discuss the factors that may come into play when determining whether to file jointly or separately.

Who Owes Most Of The Debt?

If you and your spouse are struggling financially, but most of the debt is in your name, filing separately may make sense. You can theoretically obtain a debt discharge without interfering with your spouse’s financial affairs.

If, on the other hand, you and your spouse are equally liable for most of the debt, filing jointly may be a smarter option. If you are the only one who files, the court will only be able to eliminate your personal liability for the debt, and your spouse will still be responsible for their portion. Therefore, filing jointly can alleviate the financial burden for both of you while saving you the hassle, time, and cost of two separate bankruptcy petitions.

Is Your State A Community Property State?

This question will help you determine who is liable for your debt. If you live in a community property state, you and your spouse share assets and debts equally. If you live in a common law state, on the other hand, you only share debts or assets equally with your spouse if both your names are on the titles, contracts, or other ownership/liability documents.

Illinois is a common law state. If you live in Illinois, therefore, your spouse is only liable for your debt if they co-signed for the loan or credit.

Who Owns Most Of The Assets?

As with debt, asset ownership plays a significant role in whether you should file separately or jointly. In addition to whether you are living in a community property state or common law state, you may need to consider factors like prenuptial agreements and inheritances before making your decision. If one spouse owns most of the assets, they might not benefit from a joint petition, which could jeopardize their property ownership (depending on what exemptions you may be able to claim).

Let Us Help You Determine The Right Way Forward

These are just a few of the factors that you may need to consider when determining whether to file a separate or joint bankruptcy petition. When you bring your financial crisis to Bach Law Offices, Inc., we can discuss all the details of your current circumstances as well as your short-term and long-term goals. With over four decades of experience helping clients navigate the complexities of bankruptcy and other forms of debt relief, we have what it takes to develop the personalized strategy you and your spouse need to build a better future.

Get started with a complimentary case review by calling (847) 440-5998 or contacting us online today.