Can I file bankruptcy by myself if I'm married?
If you are married and you want to file bankruptcy, your spouse does not have to file with you, but they may still be affected. How they will be affected, however, will vary depending on whether you live in a community or common law property state.
Community Property vs. Common Law Property States
If you live in a common law property state the state follows the rules of equitable distribution. If you live in a community property state, the state considers the property you and your spouse acquired during the marriage to be owned by both spouses equally, regardless of which spouse is listed on the title. State laws will determine what property is considered part of your bankruptcy estate.
Common Law Property States
In a common law property state if you purchased the property, then it belongs to you. If you purchased the property with your spouse, the courts will consider the property to be jointly owned, with each spouse owning half of the assets, unless otherwise specified.
How is property treated in bankruptcy? If you live in a common law state and you file for bankruptcy without your spouse, the property you own and the property you own jointly can be considered part of your estate. State laws allow bankruptcy exemptions to protect certain assets up to a designated limit, but if the state exemptions do not protect your assets and you decide to file Chapter 7 bankruptcy, your assets could be liquidated by the trustee to repay your creditors.
What about property your spouse owns? If you decide to file bankruptcy without your spouse in a common law property state, the property your spouse owns and their share of joint property are excluded from the bankruptcy. Consider, however, filing bankruptcy on your own may not protect jointly held property. Under some conditions, the trustee could liquidate the entire asset and pay the non-filing spouse for their part of the asset. Property which can be divided and sold will be divided.
How are my debts treated if I file without my spouse?
If you file bankruptcy without your spouse and your qualifying unsecured debts are discharged, you will no longer be obligated to pay your portion of the debts, even those owned jointly. Consider, however, this will not eliminate your spouse's obligation to pay debts they have on their own or the debts they owned jointly with you.
Community Property States
In a community property state most property which is purchased or otherwise acquired during marriage is owned equally by both spouses, regardless of whose name appears on the property title.
In a community property state if you file bankruptcy without your spouse all of the community property is part of the bankruptcy estate. It is very likely in a community property state you will put more property at risk than if you filed in a common law state. Additionally, because some states allow spouses to double their bankruptcy exemptions if they file jointly, it could be better in some cases to file with your spouse. Keep in mind, however, if your spouse has separate property it will not be included in your bankruptcy.
Discharge of debts
If you file without your spouse in a community property state you will receive the discharge, not your spouse. The non-filing spouse remains liable for their joint and separate debts.
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After filing bankruptcy certain property may be protected through your state's bankruptcy exemption laws.