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Can One Spouse File Bankruptcy?

When one spouse has incurred a great deal of debt in his or her name only, he or she can file for bankruptcy without requiring their spouse to do so as well. However, in filing for bankruptcy, income and other asset information of the non-filing spouse is required in order to determine if the filing spouse qualifies for Chapter 7 liquidation or Chapter 13 reorganization. 

Additionally, while a non-filing spouse is not liable for a filing spouse's debt, if joint property is owned between them their estate may be not be immune to actions on the part of creditors.


When only One Spouse needs to file for Chapter 7

While only one spouse may be filing for bankruptcy, the court will consider household income in order to determine if the filing spouse is eligible to file for Chapter 7. In cases where a filing spouse has little disposable income but a non-filing spouse earns substantially more, the income of both must be reported on bankruptcy forms.

If the household income is more than the qualifying median income required for filing Chapter 7, the filing spouse may have to file under Chapter 13. In either case, the court will consider what your current monthly income (CMI) is by deducting expenses your spouse pays that are not related to monthly household costs. After determining your CMI, the court will then determine you disposable income.  For example, if your spouse pays $500 on a car loan, $500 will be deducted from your total costs in order to determine your monthly disposable income.
 

When One Spouse must file under Chapter 13

If the household income of a filing spouse disqualifies him or her for Chapter 7, he or she can still file under Chapter 13. Under Chapter 13, a trustee is appointed by the court in order to administer the repayment of debt according to a plan agreed to by the filing spouse's creditors. While the non-filing spouse will not be involved in the Chapter 13 repayment plan, his or her income will be considered when determining the repayment schedule.
 

Credit Reports and Non-Filing Spouses

In theory, any debt carried by one spouse that is his or hers alone, will not appear on the other spouse's credit report. Additionally, bankruptcy on the part of one spouse should not appear on the credit report of a non-filing spouse unless they have joint debt together.

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Florida Bankruptcy Services