Louisville Bankruptcy: Does My Spouse Have to File Bankruptcy If I Do?

When you make the decision to file bankruptcy in Louisville you will surely have a lot of questions that arise. One common question is whether or not your spouse is required to file bankruptcy if you do. Although it is quite common for spouses to file together, usually because they acquired debts together, it is not required. The nuances of bankruptcy are best interpreted by an experienced bankruptcy attorney.

Your spouse may accompany you to the 341 meeting, which is known as the meeting of the creditors, though it is not required. If your spouse opts to accompany you to the 341 meeting he or she can witness the process and act as a moral support, but your spouse will not be permitted to speak with the bankruptcy trustee.

When you file for bankruptcy alone your spouse will not receive relief from his or her debts. However, the bankruptcy trustee will ask for your spouse’s financial documents. This is because when married, it is your joint income that is taken into consideration when determining whether you qualify for Chapter 7 or Chapter 13 bankruptcy. Only assets you own, jointly or individually, are taken into consideration. However, this is not as simple as it seems. The State of Kentucky is a common law state. This means that if your name appears on the registration, ownership document, or title of an asset, you legally own all or part of it. Jointly held assets can complicate matters if only one spouse is filing and wishes to file a Chapter 7 bankruptcy because non-exempt assets of a debtor can be seized and sold to pay creditors in a Chapter 7 filing. As a result, a non-filing spouse’s interest in an asset could be subject to sale in a Chapter 7. Although the non-filing spouse must be reimbursed for his/her interest, the forced sale can be an unwanted consequence when only one spouse files for bankruptcy.

For the most part, when one spouse files, the non-filing spouse’s credit is not impacted. The most notable exception to this rule is when the filing spouse is seeking relief from a joint debt in the bankruptcy. In this type of situation the discharged debt may continue to appear on the non-filing spouse’s credit report. More importantly, the non-filing spouse will remain liable for the debt. In other words, if you discharge a joint debt in bankruptcy your spouse does not get relief from that debt and, therefore, remains responsible for paying it.

It is not easy to decide to file bankruptcy in Louisville. Once you have made that difficult decision your spouse may be concerned that he or she will have to file with you. While that is not a requirement it is sometimes the best option. You should hire an experienced Louisville bankruptcy attorney to represent and advise you as soon as you begin to consider filing for bankruptcy.