Marriage and intermingled personal finances commonly coexist. Spouses in Florida who are contemplating filing bankruptcy often contact the law offices of P.R. Smith Law Group P.A. to ask, "Does my spouse have to file bankruptcy with me?" The short answer is this: No, spouses do not have to file bankruptcy together. One may file without the other's participation.
In some cases, it definitely makes the most sense for just one spouse to file bankruptcy rather than both. This may be the case when significant property is owned by both spouses together through "tenancy in the entirety." Property belonging to the spouse who does not file bankruptcy — including property owned through tenancy in the entirety — is protected from creditors and remains the possession of the non-filer. This strategy of having only one spouse file will usually work when husband and wife do not have joint unsecured debt such as credit card balances.
On the other hand, if there are significant debts in both spouses' names, it may make sense to file bankruptcy together, with only one filing fee to pay. Married couples usually own property together, and they often incur joint debts, as well. A joint bankruptcy saves time and money, and may be the best solution when most property and debts in a marriage belong to both spouses.
For more detailed advise suitable to your particular financial situation, talk to a bankruptcy lawyer.
Separate Property and Bankruptcy
On the other hand, spouses often have separate property also. One may have an interest in a business that the other is not a part of. A husband or wife may bring property into a marriage, and that property may remain the separate property of the original owner. One spouse may not want to participate in a bankruptcy out of a desire to protect a business or to protect other types of separate property.
Joint Debt and Separate Debt
Debt is the main focus of a bankruptcy. Debt brought into a marriage will be the responsibility of the spouse who originated the debt. Although you are not legally responsible for debts incurred solely by your spouse during the marriage, those debts invariably affect the overall financial well-being of your family. The nature of the debts that are the focus of the bankruptcy — jointly owned or separately owned — may determine whether it is best for a married couple to both file bankruptcy, or if it is best for just one spouse to file.
When Might One Spouse File Bankruptcy Without the Other?
Examples of scenarios where one spouse wants to file bankruptcy but not the other are as follows:
- Both spouses have a lot of debt. One receives a large piece of real estate as a gift from a parent. The home may be jointly held with siblings or it may sit on land that is larger than the allowed acreage in a bankruptcy homestead exemption. In such a case, it most likely makes sense for the other spouse to file bankruptcy, but not the one who received the real estate. Once that other spouse's debt is discharged, the couple can find other ways to deal with any remaining debt in the name of the one who received the partial or full interest in real estate.
- One spouse may have already filed bankruptcy before a marriage takes place, but the couple does not want to wait to get married. The original bankruptcy will proceed without participation of the new spouse. If the other spouse needs to file bankruptcy at some point, he or she can do so with no waiting period dependent on the other's bankruptcy filing.
- One spouse owns a business in partnership with people outside the family. The business goes bad and the business owners decide the business itself should file bankruptcy. The spouse who is not involved in the business has no need to be involved in the bankruptcy.
Many other sets of facts may point to a recommended debt relief solution of one spouse filing bankruptcy without the other. To maximize the benefits of bankruptcy, it is important to ask for advice from an experienced bankruptcy attorney at your earliest convenience.
Must a Husband and Wife File Chapter 7 or Chapter 13 Bankruptcy Together? Discuss Your Situation With a Florida Lawyer in a Free Initial Consultation at P.R. Smith Law Group, P.A.
For more information on marriage or divorce and the bankruptcy process or to speak with an attorney about your rights, contact the P.R. Smith Law Group to schedule a free initial consultation. Call 888-682-5251 toll to make an appointment in our Tampa office or one of our other Florida offices.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
