how does a bankruptcy affect my spouse | bankruptcy attorneys memphis

Common questions about bankruptcy and marriage

By: Darrell Castle

Bankruptcy comes with a lot of myths, and some of the biggest involve how it might affect your spouse. Here are some answers to think about in the case of couples who are considering bankruptcy and are not separated or divorced:

Do both spouses have to file for bankruptcy?

No, it is not required that you file a joint bankruptcy. If one spouse has a lot of debt in his or her name only, it may help to file separately depending on the state in which you’re located. However, if you have assets you want to keep that are under both of your names – like a house, for example – or if you have debts to discharge for which you’re both liable, you will want to file together. In that case, filing separately would just make the other spouse entirely liable for the debt, which would not solve your problem.

Will bankruptcy hurt both of our credit scores?

There are laws against one spouse’s bad credit score automatically affecting the other, so if you happen to have completely separate financial lives it is possible that only one person’s credit will be affected. However, if you have any joint accounts or debts that you’re both liable for, bankruptcy will likely affect both of your credit scores. That includes joint credit card accounts.

If I file bankruptcy does my spouse need to know?

Technically bankruptcy is made public in law records, but in general most people will not have to know that you file bankruptcy. In addition, you only need a spouse’s permission to file if you have joint accounts or assets; but most married couples do have some financial connections and many choose to file jointly out of necessity. In that case your spouse will have to be an informed and willing participant.

If you’re concerned that your spouse will find out about your bankruptcy, you probably have some bigger problems to deal with than debt. While it can be embarrassing to admit your situation even and especially to the people you love, bankruptcy is meant to help you, and you will likely find much more financial stability in the future if you and your partner work together to solve the problem.

Getting Answers for Your Unique Financial Situation

Each couple considering bankruptcy is unique. Our Memphis bankruptcy attorneys sit down with our clients and discuss everything with you so that you and we have a clear picture of how to proceed. We can help you answer specific questions about your assets, income, and credit, and how this decision may affect each of you.

Call us at (901) 327-2100 to talk with an experienced bankruptcy attorney today, or fill out a contact form on this page.