If you’re going through financial difficulties and you’re married, you may wonder whether filing for bankruptcy will have an impact on your spouse.
Read on to learn the answer and more.
Filing For Bankruptcy
If you’re married, you may file for bankruptcy as an individual, without your spouse. Regardless of whether you file individually or with your spouse, your bankruptcy may have implications for your spouse. Generally, the impacts of your bankruptcy on your spouse will largely depend on the following factors:
- Whether you have debts or joint property with your spouse
- The property laws in Alabama
- Whether you file for Chapter 7 or Chapter 13 bankruptcy
Your Spouse’s Credit
Your spouse’s credit won’t usually be affected if you file without your spouse. However, if you have joint debts, your bankruptcy filing in order to clear your debts may be presented on your spouse’s credit report. Subsequently, your creditors will obtain a notice about your bankruptcy and may come after your spouse in order to acquire your joint debts.
Your Individual and Joint Property
Any property that your spouse owns as an individual shouldn’t be impacted by your bankruptcy. However, if you have any joint assets since Alabama is a common law state, they will be regarded as part of your bankruptcy estate.
If you’re filing for Chapter 7 bankruptcy, it’s important to keep in mind that the delegated bankruptcy trustee is able to sell off the whole jointly owned property if you’re unable to exempt the amount of your interest and the property isn’t able to be divided. If the trustee sells off the asset, they will need to pay your spouse for the amount of their interest and utilize your segment of the nonexempt revenue to repay your creditors.
We Can Help
If you’re facing overwhelming debt and cannot make ends meet while being harassed by creditors, it may be time to file for bankruptcy. This isn’t an easy decision to make, but if you believe you’re ready, our team is here to help. We have assisted countless others in similar situations to regain control of their finances, and we can help you, too. Don’t hesitate to contact us with any questions you may have right away.