Spouses Debt Is Your Debt
Topics: student loans, college student loans, private student loans
Going bankrupt can be a difficult decision. What adds to the difficulty of the decision more is that, if you are married, you may not know whether or not to file for bankruptcy together, or if only one of you should do it. Do both spouses have to declare bankruptcy, or can it be just one?
The answer to that question depends on the circumstances. Several factors affect that decision, like when the debt was incurred, whether or not the couple is separated, and how many joint accounts there are under the particular couple’s names. There can be several answers to this question.
Under certain circumstances, certain options may be better than others. There is really no solution, other than that you are going bankrupt, which is more of a resort than a solution. However, the way in which you handle your bankruptcy can greatly affect how much trouble you have in the future, and it can either create more or lighten the financial burdens you are carrying.
If you and your spouse are no longer together, obviously you are not obligated to file for bankruptcy together. In fact, it may be a better choice for you, so that you do not have to associate your finances together anymore. This is especially the best option if only one spouse is responsible for the debt for which you are going bankrupt, because only the person responsible should have to pay, and only the person whose name is on the contract will pay.
Debt incurred prior to marriage by one spouse is, in fact, that person’s responsibility. It is their obligation only to pay for their debt, unless of course you cosigned for that debt. Only the people who signed the contract are obligated by law to pay the debt, therefore, if you are not obligated to pay, there is no need for you to go bankrupt as well.
If two spouses have jointly signed for a credit account and have resorted to bankruptcy, it is both parties’ obligation to pay. Because of this, you would most likely both want to file for bankruptcy. If only one spouse files, then the debt is still owed by the person who did not file.
Sure, perhaps it would leave one credit report clean, but it would not remove the debt from the household. If you want the protection from the debts that you owe together, you must both file for bankruptcy. Bankruptcy laws cannot protect both spouses if only one declares individually.
The reason you would want to file individually is because of your credit reports. If one person will not be obligated to pay off the debt if the other files for bankruptcy, then the only one that should file is the one responsible for the debt. This will leave the other’s credit report untouched, giving them the opportunity to get credit more easily in the future.
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