Filing bankruptcy without a spouse raises a common question: what happens to the spouse who does not file? The answer depends on whether the couple has joint debts. This post covers how a joint credit card, a shared mortgage or car loan, and creditor reporting may come into play.
Frequently Asked Questions
Will filing bankruptcy affect my spouse if they don’t file too?
Whether or not a bankruptcy will impact your spouse depends on whether you have joint debts. If you’re the only one who files and your spouse does not file with you, your spouse also doesn’t get the benefit of the bankruptcy discharge. So, if you have a joint credit card, for example, you would be discharged from that credit card debt, but your spouse would not. If you have no joint debts, the bankruptcy should not have any impact on your spouse.
Another key situation is if you have a mortgage or a car loan together. If you file a bankruptcy, part of the automatic stay, which is the protection that you get in a bankruptcy, does prevent creditors from reporting to your credit reporting agencies. And while you’re in the bankruptcy, they may also stop reporting for a co-debtor, such as a spouse. So, it may impact them in the sense that the creditor may stop reporting the monthly payments that are being made while you’re in the bankruptcy.
Are you struggling financially? Pratt & Maegli Law Firm in Rockford helps Illinois families and individuals explore Chapter 7 and Chapter 13 options with clear answers and a personal approach. Call (815) 315-0683 or visit rockfordbankruptcytoday.com to schedule a confidential consultation and take the first step toward real financial relief.