Married couples are not required to file joint bankruptcies. One individual alone may file. Of course, both can file together as well. A common question I get is “I want to file bankruptcy, but my spouse does not want to be involved. Do they have to be?”
While they are not required to file jointly with you, there is certain information about your non-filing spouse that needs to be disclosed. First, the court will look at both incomes in determining the means test and the ability to repay. Even if only one spouse is filing, entire household income is used in determining the ability to repay. This includes income for things such as Social Security, retirement, accounts, pensions, or self-employment. This information cannot be omitted. The court will also want to look at any joint tax returns. Total household income will always be important to determine.
A second thing the court will want to look at for a married couples is equity in a marital home. Even if only one spouse is filing, the home and its equity must still be exempted from your creditors. If the home is owned jointly in a marriage, the equity in that home is split in half for bankruptcy purposes. That amount must be exempted. This will go for other assets as well, such as second properties, rental properties, vehicles, or marital savings.
A final thing which will be important to discuss with your bankruptcy attorney is whether it makes more sense to file jointly to account for all debts. In a scenario where there are many joint debts, filing for only one spouse usually does not make much sense. If both spouses cannot be convinced to do so, they’re not required to. However, if they later to decide to file on their own it will entail all new attorney and filing fees. It’s best to think long and hard whether or not filing jointly is the best way going forward.
If you and your spouse are considering whether or not to file bankruptcy, call us at 412-414-9366. I would be happy to set up a free consultation to discuss your situation and see if bankruptcy is an option for you.