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Does Filing for Bankruptcy Affect Your Spouse?

Married couples share every aspect of their life with one another, even their finances. Still, sometimes one member of the marriage may need to declare bankruptcy to get out from under their debt, even if the other doesn't. If you are married, you can file for bankruptcy without your spouse. However, even if you file as an individual, it may still affect them.

How Can Your Bankruptcy Affect Your Spouse?

If you file for bankruptcy as an individual, it will not affect them in most cases. If you have joint debts discharged in the bankruptcy, however, the bankruptcy may appear on your spouse’s credit. When you file for bankruptcy, it discharges your personal debt, but your spouse is still obligated to pay back his or her own debts or joint debts. Creditors can go after your spouse to collect your joint debts.

However, if you live in a community property state and discharge the debts you owe jointly with your spouse, the creditors cannot go after your marital community property after your bankruptcy. In this case, your spouse benefits from discharge of your joint debts.

Filing for Chapter 13 bankruptcy can protect your spouse from creditors with the Co-Debtor stay. A Co-Debtor protects the debtor against almost all types of debt collection activity. Chapter 13 also prohibits creditors from coming after your co-debtors during a bankruptcy. In a Chapter 7 bankruptcy, the collector will not be able to collect the debt from you, but it can collect it from your spouse.

Find Financial Freedom with Huebner Law Firm P.C.

Filing for bankruptcy is a challenging process, especially if affects your loved one. Understanding your options helps you both make confident, informed decisions. If you are considering filing for bankruptcy, contact our experienced bankruptcy attorney today to explain the different options available to you. Huebner Law Firm has helped hundreds of families recover from difficult financial situations. Contact us today: (817) 576-1889!

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