Do both husband and wife have to file bankruptcy in Minnesota?
In life, accidents happen and debts can accrue but that doesn’t mean that both husband and wife need to file bankruptcy together. However, when it gets to be too much, bankruptcy can be an option to escape an otherwise hopeless financial situation that life sometimes thrusts upon you. However, if you are married, bankruptcy can be even more of a worrying situation since, as in most other things, it seems like you will be in that situation together too. However, if one spouse files for bankruptcy, does the other spouse have to file as well?
Both spouses do not need to file bankruptcy together
The good news is that they don’t. Spouses can file together or separately if they so choose, both having various benefits depending on the circumstances. While it would be great to leave it at the good news, the unfortunate reality is that it might not be wise for one spouse to file for bankruptcy on their own. It would be fine if the spouse filing for bankruptcy has their own personal debts, but in marriage, many obligations are shared including financial ones. After one spouse files bankruptcy, the shared debt then reverts solely on the husband or wife that did not file, which means that you really didn’t escape that debt at all, did you?
Creditors have every right to go after the non-filing spouse for the debt if bankruptcy is not filed together. This can make it so the other spouse will need to file bankruptcy themselves, meaning the married party is stuck with double the legal bills simply because they forgot to ask their lawyer this one important question: Should we file together?
So why would a married couple ever file for bankruptcy separately? In cases of recently married couples, one spouse can have a large amount of debt that they accrued before the marriage, making it their own personal debt. Even if the couple was dating while the debt was accrued, it is not legally shared until the marriage license is finalized. Any purchases made after that moment are shared by the married couple, but anything before that is still personal debt. This means that a spouse can file bankruptcy separately with great success if the debt was accrued before they were actually married and the other spouse will still be safe from their creditors.
One final thing to consider is the event of divorce. If your marriage is feeling the strain due to large debts or even a bankruptcy filing, you would not be the first. Even in the event of an impending divorce, it is still beneficial for both of you to stay together long enough to file bankruptcy, then file for divorce, except in the case of Chapter 13 bankruptcy which can often go on for years. In the case of Chapter 13 filings, it might be better to divorce first since many couple can’t wait the three to five years to complete and moving forward with a divorce in the middle of it can vastly complicate things. The major benefit of filing together even if you are getting a divorce is the same as if you were staying married – You don’t have to pay double the lawyer fees that will come out of your married assets.
Call a Minneapolis Bankruptcy Attorney
If you are considering filing bankruptcy in Minnesota and aren’t sure if the debts are your own or also shared by your spouse, contact us today. The Buettner Law Group, LLC is a Minneapolis Bankruptcy Law Firm that can help you through every step of your bankruptcy process so you get a result that is right for both you and your spouse. We want to make sure that you only have to file bankruptcy once and don’t get stuck having to do it again if you don’t need to.