Filing for bankruptcy can be an intensely personal decision, but what happens to your romantic partner if you file? Just how involved does your partner have to be in your filing? Do they need to file with you? The answer to these and other questions depend on your marital status and your living situation.
Unmarried
If you are unmarried, your partner cannot file jointly with you whether they live with you or not. If both of you want to file, you will have to file two separate cases.
Married
If you are married to your partner then your finances are linked together more closely. For starters, any debt accrued while married will be treated as community debt (even if a spouse is not named on the debt).
Second, you have a choice of whether or not you wish to include your spouse as a named party in your case. However, if you live together, you must disclose any and all income from both of you to see under which chapter you qualify. Because of the community debt problem, many couples will opt to file together, but it is not unheard of for a married couple to just have one person file while the other remains unnamed in their case. This can protect a non-filing spouse’s credit score and enable them to keep borrowing while their spouse is in the midst of their case.
Married, but Separated
This situation is a bit more complicated and if you are considering divorce or are separated from your spouse, there may be a reason to hold off on filing your case until a divorce is finalized.
First, if you are married but separated you do not need to list your spouse’s income, but if they are contributing to your household’s income voluntarily or due to a family court order, these sources of income must be disclosed and accounted for in your case filing. After finalizing the divorce the same logic applies.
A reason to possibly hold off on filing if you fall into this category is that if you file bankruptcy and receive a discharge before a family court assigns your community debts then you can find yourself liable to your ex-spouse for a debt you thought was discharged in bankruptcy. Another reason that might warrant holding off on filing bankruptcy is to see how the community assets will be divided. Assets that can be non-exempt and open to liquidation in bankruptcy may become a non-issue after those assets have been divided in the family law proceedings.
If you have questions about the bankruptcy process and how it might affect your partner or spouse, please feel free to reach out to your Stockton bankruptcy attorney at (707) 385-0422.