If you’re married Filing Bankruptcy Without Your Spouse isn’t a problem One of the concerns our clients often have is about their marriage and the effect it may have on bankruptcy. Bankruptcy and marital status do matter, but mostly in ways that are beneficial to the debtor.

Marriage and Filing Bankruptcy Together

Bankruptcy laws allow married couples to file a case together or filing bankruptcy without your spouse is okay too.  This pools their assets and liabilities and wipes out all of the latter for both spouses.  This is beneficial for two reasons.  First, it allows the couple to take advantage of bankruptcy exemptions, particularly the exception for vehicles.  If a person files individually, they may exempt one vehicle from the bankruptcy estate.  If a couple files jointly, they can both take the exemption and keep two vehicles.

Second, in a situation where the couple has been married for a number of years, it is likely that they both contributed to debt.  In that case, filing bankruptcy for just one half of the couple would only eliminate the debts as to the filing spouse.  Creditors could still take action against the non-filing spouse.  This could lead to a situation where, after one spouse has already filed and completed an individual bankruptcy, the other spouse must do the same.  Filing jointly in such cases saves time, money, and stress.

Marriage and Filing as an Individual

That said, there are circumstances where it is beneficial for a spouse to file as an individual.  For instance, it could be a relatively new marriage, or the couple could have all of the debts in the exclusive name of one spouse, leaving the other debt free.  In those circumstances, the married individual can file as an individual, but the marriage will have certain effects.

First, the individual can claim their spouse as a dependent.  This increases their family size to two.  They then may add any children as additional dependents.  This is important, because the means test (the form that determines if a person may file a chapter 7 bankruptcy) is takes into account family size, and the larger the family the higher the cap on income.  The potential downside to this is that when income and expenses are determined, family income, rather than individual, is used.  So, if the filing spouse has a relatively low paying position, they would still need to account for their spouse’s higher income just as if they were filing together.

One more circumstance worth consideration is bankruptcy prior to divorce.  If a couple is planning on divorcing, it can often be extremely beneficial to file a joint bankruptcy beforehand.  This allows for them to eliminate all dischargable debts prior to negotiating the divorce.  One of the more contentious areas for a divorce is who gets what and who pays what.  By eliminating most of the liabilities prior to starting the divorce process, a couple can avoid unnecessary fighting and stress.

Read This Related Oklahoma Bankruptcy Topics; Secured and unsecured debts in bankruptcy

Legal Support For Your Oklahoma Bankruptcy Filing

Married Filing Bankruptcy Without Your Spouse is okay. In most circumstances, a joint bankruptcy is the most beneficial choice for a couple contemplating bankruptcy.  If you are a couple considering bankruptcy, consult an experienced bankruptcy attorney today.  Our Tulsa bankruptcy attorneys can review your situation and help you decide what is best for your circumstances. Free help and questions at 918.739.8984