The decision to file bankruptcy is not an easy one, especially when married or separated from a spouse. Money troubles in marriage can be complicated enough, but filing for bankruptcy doesn’t have to be. The key is knowing what your options are and which option may be suit your financial situation.
Filing for bankruptcy in marriage affords you two options: (1) to file as an individual, separate from your spouse or (2) file jointly, as a couple.
Filing separately from a spouse means that you are filing for debt resolution for yourself only, leaving your spouse of the case. This option is good when you hold the responsibility for accumulating the bulk of the debts, have very few shared debts or the debts were owned by you prior to the marriage. When the balance of liability is greater on one spouse than the other, filing as an individual can protect the non-filing spouse from credit damage. However, if any shared assets are at risk of liquidation when filing the non-filing spouse may find they cannot protect the asset.
Filing for bankruptcy together in marriage means that both you and your spouse are declaring liability over the debts and requesting debt resolution. This shared responsibility of debts is best when most of the debt accounts are acquired together in marriage or are joint accounts, meaning you both are on the credit application or listed as the responsible party. Although filing together may mean you share the responsibility of credit consequences associated with delinquent accounts prior to the filing, it does offer a way to protect shared assets.