Married Couple Filing Separate Bankruptcies

It is quite common for me to get a call from a new client wanting to know if a husband or wife can file without his or her spouse.  In most cases, the answer is yes, a married couple can file bankruptcy in San Diego without his or her spouse.  But even if you qualify to file for relief without your husband or wife, it may be recommended by your lawyer that you file a joint case, as a couple, with your husband or wife.


If both you and your spouse are responsible for the debts you need to eliminate through your bankruptcy filing, then it will generally be advantageous for both of you to file jointly.  While the filing by one of you may protect both of your assets, the person who does not file will have late payments reported on his or her credit for up to 7 years.  So while one of you supposedly saves your credit by not filing, in reality the person who filed will start to rebuild their credit sooner and very well may (and likely will) have much better credit 2-3 years after filing bankruptcy than the person who did not join in the case filing. 


If your lawyer determines that it would be more beneficial for you to file a separate bankruptcy without your spouse, you would be considered "married filing separately."  Before a married couple filing bankruptcy can file a case separately without their spouse, the filing spouse must be sure that he or she is able to obtain a spousal waiver from the nonfiling husband or wife.  In San Diego, the court-appointed trustees always require a spousal waiver.  Otherwise, without a waiver form, the trustee will object to your filing and the filing will not go as smoothly as you would like and your case may even be dismissed.  If your case is dismissed, you will be denied relief. A spousal waiver is required in a San Diego bankruptcy filing whenever you are claiming certain exemptions.


One situation in which it may be more beneficial for you to be married filing separately, is if you and your spouse are separated and one spouse makes more money than the other spouse.  In such a case, by filing separately, you may not have to include your spouse’s income in your case, making it easier (or even possible) for you to qualify for bankruptcy.  Of course, if you are filing such a proceeding, you must be truly living separately and doing so because you intend to ultimately get divorced.  The separation must be bona fide.  You cannot just separate for purposes of filing a bankruptcy case, if you truly intend to reconcile and live together.  Intention is key, since Federal bankruptcy law and obtaining relief is centered around principles of honestly and good faith, that is, honestly disclosing your household income and assets to the court and trustee.


So can a married couple can file separate bankruptcies in San Diego?  Absolutely, but it may not always be in your best interest to do so.  There are both benefits and drawbacks to a bankruptcy filer who is married filing alone.  Always consult with an expert bankruptcy lawyer regarding your situation so that you can be advised as to the best solution for dealing with your debt problem.