Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Jun 13, 2012

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Bankruptcy is a difficult process and can strain a marriage with arguments and stress over the affects it will have on credit history. Knowing whether to jointly file for bankruptcy with a spouse is great knowledge to have when contemplating filing for bankruptcy.

Prior to choosing to file an individual bankruptcy, spouses can check if both names are on any credit cards or deeds. While Spouses are not required to jointly file for bankruptcy, sometimes it makes sense to. For instance, if both spouses share the responsibility of debt in personal loans then it is likely necessary to file for bankruptcy together.

This is important because in community property states— Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin—where both spouses are jointly responsible for debts that either person has accrued during a marriage.

Outside of these states, filing for bankruptcy only affects the spouse who is filing. The other spouse, who may or may not have their own personal debt, is not affected if they do not share debt with the spouse that is filing.

Keep in mind, certain states will hold one spouse liable for the medical debt of the other spouse and any children.

If both spouses have co-signed any debt together, then that debt is considered shared. An example of shared debt may be a car that was paid for with a personal loan that both spouses signed for.

Personal loans brought into a marriage are not shared, and would be the responsibility of the spouse who originated the debt.

Once there is significant personal loan debt that is in both spouse’s names then it may make sense to file bankruptcy together. Filing together would also save costs with a single filing fee.

If a spouse filed for bankruptcy prior to a marriage then the original bankruptcy will not include the newly married spouse. If a spouse is an owner of a business and the business files for bankruptcy then the spouse who is not involved in the business will not need to file for bankruptcy.

A single spouse filing for bankruptcy may not alleviate all problems associated with personal loan debt, especially if it leaves the family with less income or the non-filing spouse is left with some debt. Spouses may have separate property, such as interest in a business, while their husband or wife may not.