For Better or for Worse: Should I File Without my Spouse? Does He/She even have to Know?

This may come as a surprise to some, and huge relief to others: bankruptcy can be filed by one spouse without the other. The big question is: SHOULD you file without your spouse? Like most aspects of bankruptcy, the answer will depend on your particular situation.

Resorting to declaring bankruptcy can be a source of nervousness, fear, and you may be genuinely concerned about keeping your filing private. Many people contemplating filing want to be reassured that their bankruptcy won't be published in the newspaper, that their employer won't have to know, that in-laws won't be informed, their kids don't have to know, their kids' teachers, their pet groomer, their neighbors ... etc. But once a person finds out that it is possible to file without joining his or her spouse, what if they wish to keep even their spouse completely in the dark?

While, theoretically it might be possible to completely hide a bankruptcy from your non-filing spouse, it probably isn't a good idea ethically, or even as a practical matter. What will the spouse think when mail starts arriving at the house from the United States Bankruptcy Court? Or when you have to ask for his or her past pay stubs? Or when you are wandering around with a pad and pen listing the contents of the house?

And then there are the financial concerns. While a bankruptcy filing by one spouse does not automatically bring the other spouse into bankruptcy, neither does the bankruptcy of a spouse give the non filing spouse the full protection of the automatic stay or the bankruptcy discharge for debts on which they may be joint debtors. In that case, the bankruptcy of one spouse does not relieve the other of paying the debt. Upon a bankruptcy, the creditor may look to the other spouse for payment.

Generally, marriage alone doesn't make both spouses personally liable for a debt. Only those who signed loan documents or credit applications are liable for the debt. But if you have any joint debts, your bankruptcy will likely be noted in some way on your spouse's credit report even though they weren't made a party to the bankruptcy. Filing a joint tax return makes both spouses liable for the total of the tax due. And if you and your spouse own property together, that property may be included in the bankruptcy estate and be made available to pay creditors to whom you owe a joint debt.

If you still think it would be better to exclude your spouse from a bankruptcy filing, know that your bankruptcy filing will have some effect on the credit worthiness of your spouse in the future if they apply jointly with you for a loan someday. The lender will often consider both of your credit ratings in making a lending decision.

Financial implications aside, the circumstances leading to the bankruptcy are often indicative of far more serious issues happening within the relationship such as loss of employment, illnesses, emotional problems, or addiction. Failing to talk about the real issues and hiding a bankruptcy doesn't help the bigger issue-“whatever caused the financial difficulties is better worked on out in the open, together with your spouse. If the problems in your marriage have become so large that you have or are considering divorce, it is still wise to reveal your bankruptcy intentions to your spouse and your respective family attorneys, since it can have implications on how property and debts will be allocated in divorce proceedings.

A bankruptcy attorney can point you towards a path of financial stability but ultimately you are the one who must walk on that path....and it is usually better to have the full support of your loved ones. Before taking on the entire burden of filing bankruptcy alone, talk with your attorney, and, more importantly, your spouse.