Usually married couples end up filing a joint bankruptcy petition because most of their debt (mortgage, car loan, credit cards) are in both names. But there are exceptions, so if you are thinking about filing bankruptcy without your spouse here are some things to consider.
- Is any of your debt in both of your names? This includes your mortgage and any home equity line of credit, your car loan, a signature loan, and any credit card debt. While you can file bankruptcy without your spouse on this type of debt, the creditor can still go after your spouse if they are jointly liable for the debt.
- Is your spouse a co-signer or guarantor of any debt in your name? Did the bank or credit union require your spouse to co-sign or guaranty your car loan or signature loan? If you aren’t sure, have your spouse pull their credit report and check. If your spouse is a co-signor or guarantor, the creditor can demand payment from your spouse and except in the case of a mortgage, creditors typically want the balance due paid in full immediately.
- Did you add your spouse as an authorized user to any of your credit cards? Although your spouse won’t be liable for the full amount of the debt, they will be liable for anything they charged on that credit card.
- Do you and your spouse jointly own an asset that is a non-exempt asset? If so, then the Chapter 7 Trustee is going to either liquidate that asset or demand payment for your one-half interest from your spouse.
- And finally, be aware that your spouse’s income will be included in both the bankruptcy petition and Means Test Calculation. This might mean that you won’t qualify for a Chapter 7 and will have to file a Chapter 13.
These are some of the issues involved when only one spouse files bankruptcy.
As experienced Georgia bankruptcy attorneys, The Ballard Law Group has a thorough understanding of the issues involved in this type of situation. Call us today at 404-220-9906 to schedule your free initial consultation at either our Atlanta or Lawrenceville office.