Sometimes married couples think they must file for bankruptcy together, but the bankruptcy laws do not, in fact, apply the principle “until death do you part”.  Husbands and wives can file two separate bankruptcy cases under different chapters at the same time.

For example, suppose the husband recently lost his job, receives government benefits, and has a large amount of credit card debt and medical bills all of his own from a medical condition.  He owns a house jointly with his wife, and while she is employed, they have fallen behind on their mortgage payments.  She has no significant unsecured debt.  Can bankruptcy help them and stop the house foreclosure?  The answer is yes.  The wife could file a Chapter 13 case, stay the foreclosure action, and then arrange to pay the arrears under the Chapter 13 plan, thereby avoiding foreclosure all together.  The husband could file a Chapter 7.  If his interest in the house is covered by exemptions or otherwise of no value to the trustee, the trustee will abandon the interest in the house back to him.  The bank won’t foreclose because the mortgage arrears are being paid by the wife.  And through the Chapter 7, his unsecured debts (which were all his and not his wife’s) would be discharged and wiped away.

If you are a married couple in financial trouble, it really pays to speak with a qualified bankruptcy attorney.  There can sometimes be approaches to your problems that can save one spouse from filing bankruptcy entirely or that can ensure you both receive an optimal result under the bankruptcy laws.

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