Bankruptcy and Your Spouse

I have couples in my office all the time that wonder whether they should file alone or with their spouse. As with anything, there is no simple answer. However, the following guidelines will help you decide. 

The first determining factor is: does one spouse have all the debt under their name or do both spouses have debt.  If only one spouse has all the debt, only that spouse should file an individual (married) bankruptcy petition.  In the State of New Jersey, by virtue of one spouse filing, it has no direct impact on the other spouse.  The individual whose social security number is on the petition will be granted a bankruptcy discharage without effecting the other spouse.  It is important to know what "joint debt" means. If you have a credit card that you have opened and your wife is a person authorized to use that card, that does not mean that the debt is joint. Your wife is responsible for the debt only if she has co-signed for the card. 

The second and final determining factor is: how much debt does each spouse have. For example, if you have $30,000 of credit card debt and your wife has only $5000 of credit card debt, should you file a joint petition?  The answer to this depends on you.  With the amount of income that you and your wife are making and what you reasonably expect to make in the near future, do you think you will be able to repay the $5000? If the answer is yes, then do not include your wife. If you believe that you will not be able to repay the $5000, then file a joint petition.  Remember, you don't have to file together. If you decide to file an individual petition and then you realize that your wife is unable to repay the $5000, she can at that time file an individual chapter 7 bankruptcy.