Can Only One Spouse File Bankruptcy?

Can only one spouse file bankruptcy, or do both spouses have to file together? This is a common question for both committed couples and for those involved in bankruptcy and divorce.

At the Law Offices Of Russ Wyatt, we help clients throughout Southern California to understand the bankruptcy process and how it may benefit their financial futures. If you are considering filing without your spouse, we can discuss the ramifications and answer all your bankruptcy questions.

Considerations When Filing Individually

  • California is a community property state. Regardless of whether one spouse files bankruptcy or both spouses file, all assets of the marital community must be reflected in the bankruptcy papers as assets regardless of which spouse owns the asset. For example, if husband files bankruptcy and wife owns a vehicle in her own name, assuming it was acquired during marriage and is community property, the vehicle must be reflected as an asset in the bankruptcy schedules.
  • Similarly, all income being generated by the marital community must be reflected in the bankruptcy papers as income regardless of which spouse earns it. For example, if wife files bankruptcy and husband is working, assuming the earnings are marital community earnings, husband’s income must be reflected as earnings in the bankruptcy schedule.
  • Whether assets and income are community property or one spouse’s separate property depends on such factors as whether the asset or earnings were acquired prior to marriage or during marriage, whether there was a prenuptial or postnuptial agreement, and whether the asset or income was inherited.
  • When one spouse files without the other, there is no guarantee that the non filing spouse’s credit will be unaffected by the bankruptcy filing of the other spouse. For example, if there are any joint debts, the credit bureaus might report the filing of the bankruptcy on the credit report of both spouses.
  • When one spouse files without the other, the resulting bankruptcy discharge discharges both the filing spouse and the marital community of their obligations. But creditors who also have the non filing spouse on the hook may still sue the non filing spouse and obtain a judgment. The creditor would only be able to execute the judgment against the non filing spouse’s sole and separate property, if any, but creditors have a right to a judgment against the non filing spouse.

If you need more information on filing Bankruptcy, we invite you to make an appointment to come to the office in Sacramento, California, but if you cannot, we will help you file bankruptcy by e-mail, phone and mail. For more information on the basics of filing bankruptcy, contact the Law Offices Of  Russ Wyatt at 916-572-9779 to arrange your free initial consultation with Sacramento County bankruptcy law attorney today.