The short answer here is: yes, you can. But should you? Bankruptcy law is complicated and every family’s situation is different, so it’s best to consult with one of the experts at Burr Law if you are thinking about bankruptcy with or without your spouse. Here are some considerations to contemplate.
How Long Have You Been Married?
Wisconsin is a community property state. That means that property and debts accrued during the marriage are deemed jointly held in the law.
If you’ve been married quite a while, then filing jointly will allow both of you to eliminate your separate debts as well as those held jointly. It also means that both of you will participate in the decision making process. And you’ll be able to double your exemptions when you file jointly, thereby letting you retain property that you might otherwise lose.
If you’ve been married a short time, it might be a good idea for one spouse only to file for bankruptcy. This is especially true if one partner carries all or most of the debt. And if you’ve been married for a short time, you may not own any substantial property together. In this instance, filing for bankruptcy without your spouse will let the partner who isn’t having debt trouble retain any separate property and maintain a good credit rating.
Who Has The Debt?
If both you and your spouse are experiencing financial difficulties, it’s best to file jointly. With a joint filing, the property of both spouses is included in the bankruptcy estate, and all debts of both spouses are part of the filing. Filing jointly also means you complete one set of forms, incur only one filing fee, and pay one lawyer. When both of you are feeling overwhelmed with debt, filing jointly for bankruptcy gives you both a clean slate to begin anew.
If only one of you has debt, and you’ve been married a long time, filing for bankruptcy without your spouse could actually hurt them a great deal. While bankruptcy will clear all of your debts, because Wisconsin is a community property state, your spouse will remain liable for debts incurred during the course of the marriage. It’s only when one partner has most of the debt and you haven’t been married very long that filing for bankruptcy without your spouse would be a good idea.
Have You Filed Bankruptcy Before?
A separate filing may be unavoidable in certain situations. If one partner went through a Chapter 7 bankruptcy within the past 8 years or a Chapter 13 one within the past 6 years, that spouse will not be able to file another Chapter 7 bankruptcy. So if you’ve been married 5 years and your spouse went through a Chapter 7 bankruptcy 7 years ago, you cannot include your spouse in your bankruptcy filing.
These are only some general examples of situations. If you are thinking about filing bankruptcy without your spouse, contact the experts at Burr Law who can listen to your unique situation and recommend the best course of action.