If you are married, you are legally eligible to file bankruptcy separately. However, you should first consult an attorney or conduct extensive research to determine if this is the best course of action for your situation. While in some cases, filing separately makes sense, in others you will not be afforded the type of bankruptcy protection you seek, and might remain liable for some or all of your community debts.
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You can file bankruptcy separately from your spouse in one of two ways. Either you can file on your own, without your spouse filing at all, or you can both file separately as individuals. If both file, each will have to complete the extensive bankruptcy paperwork and pay the associated filing fees, effectively doubling both the paperwork and the cost. There may be legal reasons to pursue this path, and if it makes sense in your situation, your attorney should advise you of this option. If you are solely responsible for the debt in your marriage, you may choose to file on your own, without your spouse, so as not to affect your spouse's credit report.
Types of Bankruptcy
One of the first steps in filing bankruptcy is to determine which chapter is the most appropriate. A Chapter 7 bankruptcy, also known as a "straight" or "liquidation" bankruptcy, is the fastest and easiest bankruptcy chapter if you have few assets you want to protect. In Chapter 7, all your assets above certain state-defined exemption levels are liquidated and used to pay your creditors. In exchange, most of your debt is completely eliminated, except for certain types of debt such as student loans, child support and most back taxes. In a Chapter 13 bankruptcy, you are allowed to keep most of your assets but must make payments to your creditors over a three- to five-year period. If you are married, even if you are filing separately, your choice of bankruptcy chapter can have ramifications for your spouse. For example, if you choose Chapter 7 and have assets above the exemption levels, they may be sold, even if your spouse is a co-owner.
Ownership of the Debt
If you and your spouse are jointly responsible for a debt, such as a credit card where you are both authorized users, filing bankruptcy without your spouse could be a waste of time and money. Although you may obtain your bankruptcy discharge and not be personally liable for the debt, the credit card company can still pursue for payment of the debt from your spouse. Thus, your household is still responsible for the debt even though you obtained a personal discharge. If you seek to discharge either debt you incurred before marriage or debt that you can verify is in your name only, then filing bankruptcy individually may be an appropriate course of action.
If you file Chapter 7 bankruptcy correctly, you should receive a discharge about four months after you file. This will relieve you of most debts in your name, but will not afford your spouse the same protection. In a Chapter 13 proceeding, you will receive your discharge immediately after your payment plan is satisfied.
Filing any type of bankruptcy will significantly damage your credit score, and it may take years to be considered a good credit risk again. Your bankruptcy will remain on your credit report for 10 years. Your spouse's credit report should remain untouched if you file individually.