If a couple is married, the couple can file a joint bankruptcy with both spouses or one spouse may file by himself or herself without the other spouse. Regardless of whether a Chapter 7 case or a Chapter 13 case is filed, the couple may file jointly or alone. The decision as to whether or not both spouses should file together is one that should be made after thorough consideration of several factors.
Typically, if both spouses are jointly liable for most of the debt, or if they each have enough separate debt they should probably both file the bankruptcy together. In some marriages, one of the individuals has incurred all or most of the debt solely in his or her name while the other spouse has little or no debt at all. If this is the case, it may make sense for only the spouse with all or most of the debt to file for bankruptcy protection.
There are several things that the couple ought to consider when making this decision. First, if only one spouse files, the non-filing spouse will then solely be liable for any of the joint debt. This debt will only be discharged as to the filing spouse. That means for any joint debt, the bank cannot collect against the spouse who filed the case but can collect against the spouse who didn’t.
One major reason a spouse with little or no debt might decide not to file a joint bankruptcy is to preserve that spouse’s credit. This is a valid reason for one party not to file. Just make sure that it makes sense though. For example, if a husband has $30,000 in credit card debt and a wife has $15,000 in credit card debt, to some it may make sense for only the husband to file the case. However, this would only make sense if the parties have sufficient income to pay off the wife’s debt in a timely manner. If the couple only has a couple hundred dollars each month after paying for rent, food, transportation and utilities, it could take the couple twenty years to pay off the $15,000. This would not allow the couple to get a “fresh start.” Thoughtfully consider all of the options and legal ramifications before making the decision to file together or not.