How Bankruptcy By One Spouse Affects The Non-Filing Spouse
Should one spouse file bankruptcy, that does not mean the other will receive bankruptcy protection. In other words, should both spouses be liable for a debt, a filing by one of them will not relieve the other spouse from paying what is owed. Unless we deal with a Chapter 13 filing, creditors may seek payment from that other spouse. However, there are options under Chapter 13 to relieve both spouses of the debt. You will wish to consult with a skilled bankruptcy attorney to determine if this is the case.
Marriage by itself will not make both spouses liable for debts. Only those signing the paperwork will be held liable for items like credit cards and home loans. But a joint tax return can make both spouses responsible for any taxes due. And a bankruptcy filing by one spouse will likely become noted upon the credit record of the other spouse.
Community Property And Debt Discharge
In California, the co-owning of property could mean that a non-filing spouse’s belongings are available for collection. This is because it’s considered community property.
According to Section 524 of the Bankruptcy Code, spouses receive special protection in community property states. And, particular states have special rules. You will wish to speak to an attorney from these specific states to determine whether you, as a non-filing spouse, remain liable for the debt.
Call Us To Learn More
Discuss the intersection of family law and bankruptcy with attorneys who understand both. Call Simkin & Associates in Los Angeles at 310-788-9089 or book your first appointment with us online using our contact form.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.