Bankruptcy for the Married Filer: What you need to know

If you are married, you want to know if filing for bankruptcy will affect your spouse. In Illinois, if you are the only one who files, your spouse will not be negatively affected, assuming that the debts are your own and not debts that are held jointly. Your debts are your own and just like your individual credit cards won't show up on your spouse's credit report, neither will your bankruptcy. Credit scores should not be brought down just because a spouse filed for bankruptcy. Done under the correct circumstances, the only impact of your bankruptcy on your spouse will be good, because you have just freed the family from your serious financial problems. Chances are, your unpaid debt is causing stress on your husband or wife, and he or she might even be getting phone calls from creditors. If that is the case, your spouse should ask the creditor for proof that he or she is actually liable for the debt or to otherwise stop trying to collect on a debt that does not belong to them.

Just because debts are in your name and your bankruptcy won’t affect your spouse does not mean that your bankruptcy isn’t going to be affected by your spouse. Household incomes are taken into account and depending on what your husband or wife earns, this could impact your ability to either qualify for a chapter 7 or impact your repayment amount in a chapter 13, assuming that you aren’t separated. 

Sometimes it makes sense for both spouses to file. Bankruptcy law is incredibly complex and full of traps for the unwary. The decision to file for bankruptcy individually or with your spouse should depend on your own unique circumstances, taking both husband and wife's circumstances into account. The best thing to do is to speak with a bankruptcy lawyer who can help you make the best decision for you and for your family. We'd be happy to speak with you to determine if bankruptcy is a good option for you and whehter or not your spouse should also file. Give us a call or fill out our webform for more information. 

Carol O'Connor Cadiz
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Attorney & Owner at O'Connor Cadiz Law: Bankruptcy, Injury, Real Estate & Mediation