If your financial obligations become overwhelming and you have a high amount
of debt you might consider filing for bankruptcy, which may offer financial
relief. One factor you might be thinking about when deciding on taking
this legal step is how the action will affect your spouse and their finances.
Deciding How to File
When deciding to file for bankruptcy, you could either do it on your own
or jointly with your spouse. There are many things to take into consideration
when determining how to proceed. For instance, what debts you and your
spouse have together or separately, and what types of property you own?
Because there are various nuances of bankruptcy law, it’s best to
discuss your situation with a skilled attorney in St. Augustine. They
can help you understand the process and whether or not a joint or separate
filing will be best for your particular situation.
Even if you choose to file for bankruptcy on your own, the decision could
affect your spouse’s financial obligations. If you have separate
debts and property, those may be included in your bankruptcy. However,
anything your spouse has on their own will not be part of the charge off
or repayment plan. That means, they are still required to pay back what
they owe on their debts. The bankruptcy for your separate debts will not
appear on your spouse’s credit report.
Your separate bankruptcy filing may affect your spouse if you have joint
debts. Anything that’s considered part of your marital property
will be included in the bankruptcy. As with separate debts, when you have
joint debts, and you file on your own, your portion will be discharged,
but your spouse may still be required to pay. The bankruptcy may also
show up on your spouse’s credit report.
Determining Qualification for Bankruptcy
One of the most common kinds of bankruptcy people file for is
Chapter 7, which essentially eliminates qualifying debt. To be eligible for this
type, you must take an income means test. Even if you are filing separately,
your spouse’s income will be considered for qualification. If your
joint income is too high, you may not be able to file for Chapter 7.
If you don’t qualify for Chapter 7, you might consider
Chapter 13, which sets up a repayment plan for your debts. Regardless of whether
or not you’re filing separately, your spouse’s income may
be used to determine your monthly payment amount.
Obtaining Credit in the Future
Although filing bankruptcy for your own separate debts might not affect
your spouse’s credit report, if you seek to jointly obtain property
or credit in the future, your filing might affect your ability to do so.
Your ability to and how much you can borrow may be affected by your combined
Discuss Your Situation with Albaugh Law Firm
If you’re considering filing for bankruptcy, speak with our experienced
attorneys in St. Augustine. We will answer your questions regarding whether
you and your spouse should file separately or together, and we will help
find a solution to meet your best interests.
For a free consultation, call us today at (904)637-1839 or
contact us online.