Married People and Bankruptcy – Filing Individually or Jointly

As a Bankruptcy Lawyer, a fair number of prospective Clients who are married ask me if they can file a Bankruptcy without involving their spouse.  In truth, the questions also include things like “how will this affect my spouse?”  “Will it hurt or ruin their credit?” 

There are really 2 aspects to married people filing for Bankruptcy:

  1. If both spouses file, then they file what is called a “joint Petition.”  In my Office, there is no additional charge or Fee for a joint Petition.  Whether a person files alone, or with their spouse, the price is the same.
  2. If only spouse chooses to file, then they file an “individual Petition.”  That individual Petition does and will not affect their spouse, unless the person is trying to get out of joint debt. 
Let’s look at a few examples:
  • Assume Donny and Marie are married, and Marie files an individual Bankruptcy.  One of her debts is a Mastercard that she co-signed for with Donny.  It’s a joint credit card, unlike one in which a person designates another as an “authorized user.”  When Marie lists this Mastercard, Donny will be left as the sole liable party.  And while this won’t hurt his credit, he better know to not wait for Marie to be making anymore payments.
  • If Donny and Marie file a joint Petition for Bankruptcy and list this jointly-held Mastercard, they will both be discharged from any liability for it.

As a rule of thumb, a person can think of the married filing individually in this way:

  • If a married person files alone, and does not list any “joint debt” (meaning debt that both they and their spouse share, as is often the case on a Mortgage), then there is absolutely, 100% no consequence whatsoever to their spouse.
  • If a married person lists joint debt, like a Mortgage, but agrees to keep paying for it (this is called reaffirming a debt), then there will likewise be absolutely, 100% no consequence to their spouse.
  • If the married person lists a joint debt that they will not be keeping, or reaffirming, then their spouse will remain liable for the whole debt, even though the other spouse’s Bankruptcy doesn’t cause any harm to the non-filing spouses Credit rating.
  • In the case of married people filing together, then they both get the benefit of being released from any further obligation on any debts they list (but don’t reaffirm), regardless of whether those debts are individual or joint.