The short answer to this question is no, but as is so often true, there is also a more complicated answer. If you are married and have decided that filing a bankruptcy is the right solution for you, that does not mean that your spouse will have to file as well. However, as often happens, it is a definite possibility that your spouse should file with you. In many cases, although one spouse may carry most of the debt, there is usually enough joint debt, or debt in the spouse's name, to warrant a joint filing.
Typically, first and second mortgages and car loans are the most common type of joint debt because married homeowners commonly purchase their home and cars together. If one of the reasons you are looking into a bankruptcy is because you are unable to keep up with mortgage payments or car payments, and are considering letting the lender take back either the home or the car, you would need to determine whether the debt is in both your name and your spouse’s name, and if so, then it is usually advisable to file together.
Another reason that a husband and wife might decide to file together is if there is tax debt. Most married couples file joint tax returns, so if your tax filing has resulted in debt to the taxing authorities, it is almost certainly joint debt. Although most tax debts cannot be discharged in a bankruptcy, there are certain types of tax debt that can be discharged, so if that is the case, then filing together would definitely be the best option.
Mounting medical bills would be another reason to consider filing your bankruptcy together. Under Minnesota State Statute 519.05, if you are married and live with your spouse, any medical bills incurred by either spouse are considered joint debt. If one of the reasons that you are considering bankruptcy as an option is the amount of medical debt you have incurred, it is likely that filing a joint bankruptcy would be the best option for you.
Lastly, if you are over the median income and would be filing a Chapter 13 bankruptcy, there are several reasons why it may be beneficial for both you and your spouse to file that we gladly discuss with you.
However, if you have considered the types of debt mentioned above and know that you do not have any other types of joint debt (personal loans, credit cards), and have decided that your spouse would not benefit from a bankruptcy filing, or if your spouse simply does not wish to file, you certainly can file bankruptcy on your own.
Even if you file alone, your spouse may still have to be involved in a couple different aspects of the filing process. First, if you have any jointly owned assets your spouse may be involved with that aspect of your case, depending on what those assets are, how much they are worth, and whether they can be protected from the creditors. Secondly, if your spouse is employed, his/her income information must be provided when we determine your household’s current monthly income and projected monthly income to determine your eligibility to file a Chapter 7, or to determine your payments under a Chapter 13 repayment plan. In most cases, the involvement is limited to merely providing pay stubs and/or information about monthly payment obligations that your spouse may have to help determine your income and your expenses. However, hopefully, the most important thing your spouse will provide is support!
Each filing is different, but generally speaking, unless there is joint property that is non-exempt or you are in a Chapter 13 bankruptcy, your filing should not have much of an effect on your spouse, if any. For instance, it will not affect your spouse’s credit score, ability to open and maintain credit cards, or ability to finance home or car purchases. That being said, if there is any joint debt and your spouse decides not to file, he/she will then be responsible for that debt once you receive your discharge. In this case, remember that the debt is joint and several meaning that your spouse will be responsible for all of the remaining balance on joint debt, not just half of it.
At Kain & Scott we take great care in advising our clients on whether an individual or a joint bankruptcy is the best option for solving their particular financial issues. We take time to explain the potential consequences of filing individually versus filing jointly. If you are currently in Maple Grove, MN, the metro area, or outstate Minnesota, are married, are facing financial difficulties, and have questions regarding filing a bankruptcy, please contact Kain & Scott to set up a free consultation to discuss how we can help you get rid of your debt and help you get your life back.