Are my Spouse’s Bills Wiped Out in my Bankruptcy in New York City?

Married couples typically share their finances and debt troubles, but there is no requirement for married couples to file bankruptcy together.  There are times when one spouse will rack up a huge debt alone.  When this happens it could be in the best interests of the marriage for only one spouse to file bankruptcy.  However, if only one spouse files the other spouse may still be held responsible for some types of debt after the discharge like jointly held credit card debts or co-signed medical debts.  A spouse can be protected without filing for bankruptcy on their own, but each financial situation is different.  You’ll need the advice of a qualified attorney to properly protect your spouse in your bankruptcy.

In a typical chapter 7 bankruptcy case your spouse’s debt obligation to bills you share will remain in effect after you have been released from the obligation.  In a Chapter 13 there is a co-debtor stay that will prevent any creditor action from your spouse for bills you share, but not for any independent debts.  In some cases a spouse’s independent debt can be wiped out through your 100% Chapter 13 repayment plan, but depending on your income and assets this may not be the best choice. 

If one spouse has most of the marriage’s debt in their name alone it probably doesn’t make sense to file bankruptcy jointly.  The spouse not responsible for the debt could have assets or inheritances that would be subject to seizure if they unnecessarily file with their spouse. On the other hand if the non-filing spouse has few assets in their name anyway, or most of their assets connected to the filing spouse it could make sense to file bankruptcy together.  Co-filing will prevent any creditors from going after your spouse for your discharged debt and will provide a married couple a smoother financial transition into life after bankruptcy.

Your attorney will need to review the overall debt situation for the two of you to suggest the best bankruptcy strategy.  No matter who ends up actually filing it’s important that both spouses are protected in the process.  Bankruptcy will have some minor financial consequences, but the damage money problems can do to a marriage are usually much worse.  Get the advice you need and Contact the Law Offices of William Waldner online or at 212.244.2882 to arrange a free consultation today if you live in New York City.  We only practice bankruptcy law and maintain a 99% Chapter 7 bankruptcy discharge record in New York City as of 9/31/16.


**** DISCLAIMER:  This article is intended for educational purposes only.  By reading no attorney-client relationship has been created.  Prior results do not guarantee a similar result for future clients.