How Bankruptcy Affects Your Spouse

Introduction

A common concern for married couples is whether filing for bankruptcy will automatically affect their spouse. The good news: bankruptcy is an individual right, and your spouse is not always directly impacted. However, the effect depends on your situation, the type of debt, and whether you file individually or jointly.

Individual vs. Joint Filing

• Individual filing: Only one spouse files. This may be enough if most debts are in one spouse’s name.

• Joint filing: Both spouses file together. Useful when both carry significant debt or share joint obligations.

Impact on Credit

• If you file individually, your spouse’s credit is not automatically affected.

• If you share joint accounts or co-signed loans, those debts may still appear on your spouse’s credit report.

  
  

Shared Debt Considerations

• Joint debts: Creditors can still pursue your spouse if you file alone.

• Individual debts: Your spouse is not responsible.

• Co-signed loans: If you file, your spouse may become 100% responsible for repayment unless you both file.

Household Income in Bankruptcy

Even if your spouse doesn’t file, the court considers their income when reviewing your eligibility—especially for Chapter 7. This is known as the “means test.”

Property Owned Together

Maryland is not a community property state, but property owned jointly (like a home) may still be considered in bankruptcy. Exemptions can often protect your share of the property.

Chapter 13 Spousal Protections

One major benefit of Chapter 13 is the co-debtor stay, which protects your spouse from collection on joint debts while you are in your repayment plan.

The Bottom Line

• Your spouse’s credit is safe if you file individually.

• Shared debts may still affect them.

• Joint filing can sometimes provide more complete protection.

Conclusion

Bankruptcy does not have to damage your marriage or your spouse’s financial future. With the right strategy, you can protect your loved one while addressing your debt.

Contact Middleton Legal today for a free consultation to learn the best filing option for your family.