Many of our clients ask, “Will bankruptcy affect my husband?” This is an important question to consider, and a bit of a complicated one at that. There are many factors that can affect this answer so first off, I suggest you contact an experienced bankruptcy attorney, to determine the specifics of your case.
Typically, if you are married and decide to file bankruptcy individually you will be asked what kind of assets do you own with your spouse. If there are joint assets then yes the bankruptcy of one of you has the potential to effect the spouse that is not filing. Shared property and joint bank accounts also have the possibility of complicating a bankruptcy of an individual, even if they don’t file jointly.
Bank Accounts: In the instance of a shared bank account, it may be in the couple’s best interest to separate finances from the bankruptcy-filing spouse prior to filing bankrup0tcy. However, it is very important that you consult a lawyer before doing this. Property transfers shortly before filing for bankruptcy can draw attention and be challenged.
Businesses: If one of you owns a business separate from the other then this is an area of possible concern. Do you live in a community property state or a state that is quasi community property? Did you both contribute to the business in some manner? These are the type of questions your bankruptcy attorney will ask you so be prepared to explain.
Medical debts: Some states have laws that say both spouses are liable on a medical debt even if the debt is solely in the name of one party. Your bankruptcy attorney should be able to tell you how this plays out in your state,
Also, sometimes filing bankruptcy individually isn’t necessarily the best option if you and your spouse share debts, and only one one of you files since debt collectors still have the ability to contact the non-filing spouse regarding debt payments. Filing jointly can be beneficial to your spouse in that situation, because it could protect them from debt collectors.
Want to file without your spouse knowing about it? Good luck since bankruptcy is actually a public record it is unlikely that a non-filing spouse will not know you filed. If there are your concerns, and you are in Utah give us a call and set up a consultation today the team at the Utah Bankruptcy Guy can help!