Can I File Chapter 13 Without My Spouse?

You can file for Chapter 13 bankruptcy without your spouse. While married couples often file jointly to address their combined debts, there are situations where it may make sense for one spouse to file individually. Here are some considerations and implications of filing for Chapter 13 bankruptcy without your spouse:

Individual Filing Considerations

• Debt Ownership: If the majority of the debt is in one spouse’s name, it might be practical for only that spouse to file for bankruptcy. This can protect the non-filing spouse’s credit score and leave their separate assets unaffected by the bankruptcy process.
• State Property Laws: The impact of an individual Chapter 13 filing on the non-filing spouse can vary depending on whether you live in a common law property state or a community property state. In common law states, only the property owned by the filing spouse can be included in the bankruptcy estate. In community property states, all marital property might be considered part of the bankruptcy estate, even if only one spouse files.
• Automatic Stay: The automatic stay that stops collection actions against the debtor who files for Chapter 13 does not extend to the non-filing spouse unless the debt is joint. Creditors might still pursue the non-filing spouse for repayment of joint debts.

Benefits of Individual Filing

• Protecting One Spouse’s Credit: By filing individually, the non-filing spouse may preserve their credit rating, which can be beneficial for maintaining eligibility for future loans or credit lines that the household may need.
• Strategic Financial Planning: Couples might choose to have one spouse file for bankruptcy to discharge eligible debts while preserving the other spouse’s financial standing for future financial activities, such as purchasing a home.

Joint Debts and the Non-Filing Spouse

If you have joint debts and only one spouse files for Chapter 13, the non-filing spouse could still be responsible for repaying the entire debt. Chapter 13 provides a co-debtor stay which can protect co-debtors during the bankruptcy process, but the protection is not as comprehensive as the automatic stay for the filing debtor. It’s important to understand how filing individually affects the responsibility for joint debts.

The Process and Impact

When one spouse files for Chapter 13 bankruptcy, the filing spouse will propose a repayment plan to pay back all or a portion of their debts over a three to five-year period. The non-filing spouse’s income may still be considered in creating the repayment plan, as household income affects the filing spouse’s ability to pay creditors.

Filing for Chapter 13 bankruptcy without your spouse is a viable option that may be advantageous depending on your specific financial situation, the nature of your debts, and your long-term financial goals. However, it’s essential to consider the legal and financial implications for both spouses. Consulting with a knowledgeable bankruptcy attorney can provide guidance tailored to your circumstances, helping you make an informed decision that aligns with your family’s financial well-being.