One of the most common questions that many married couples face is whether or not filing for bankruptcy will affect individual finances. As a married couple shares every aspect of their finances it is possible that two members of their relationship may need to declare bankruptcy together even if one person has a great credit rating and zero debt. It is possible to file for bankruptcy without your spouse but even if you file as an individual a bankruptcy claim can affect your spouse.
If you decide to file as an individual it often will not affect your spouse unless you carry some type of joint debt. Joint debts that are discharged in bankruptcy will appear on your spouses credit if you file only under the concerns for your personal debt, it may not affect your spouse unless they are linked on the account. If you are spouse is connected to the account they will be obligated to pay their debts as well as joint debts. Creditors can directly go after spouses to handle the process of debt consolidation or for the discharge of joint debts.
One of the easiest ways to protect your spouse in the event that you need to file for bankruptcy is with Chapter 13. With the help of a co-debtor stay clause, you can make sure that all types of debt collection activity will not be targeted at your spouse. Chapter 13 prohibits creditors from coming after cool debtors during the course of a bankruptcy. If you file for Chapter 7 bankruptcy however a debt collector will be able to come and collect a debt from your spouse as well as yourself. Filing for Chapter 13 bankruptcy with proper protection in mind is the only way to protect your spouse in a bankruptcy case.
If you’d like assistance in filing for bankruptcy while protecting your spouse contact us today.