A common question posed to a Wauconda bankruptcy lawyer is will my spouse’s credit be affected if I file for bankruptcy and she doesn’t?The answer to that question really depends on whether or not you have any joint debt together. If you and your spouse are both on a credit card bill and you file bankruptcy individually, that creditor has the right to collect against the co-debtor who is your spouse because she did not file for bankruptcy protection.
What I would recommend is whenever you have joint debt and you are a married couple, it would be beneficial for both parties to file together. They can file together under the same case, the same court costs and the same Chapter 7 bankruptcy attorney fees. The advantage is the debt is eliminated as to both parties. The creditor has to wipe out the debt and cannot pursue either one of the parties since it was a joint bankruptcy filing.
There are some cases where parties have gotten a divorce and they both may be on a mortgage or they both may be on a car payment and one party decides to file for Chapter 7 bankruptcy protection. In that circumstance, the person who files for Chapter 7 bankruptcy protection will be eliminated from having to pay any obligation on that debt. The non-filing party will be responsible for the outstanding debt and the creditor is free to pursue that party. It may say on the non-filing parties’ credit report that that account was included in someone else’s bankruptcy. This notation will have a slight effect on the non-filing spouse’s credit rating but it will not be too severe since that person is not making a bankruptcy claim. So I recommend if you have joint debt, filed jointly if you are married because you will save money, you will save time and you eliminate that creditor from ever causing a problem in the future.
With divorced couples, you can run into a problem where one spouse eliminates the debt but the divorce decree said that that spouse was going to pay the debt. Therefore, you might have a situation where a non-filing spouse brings an ex back into divorce court arguing that he or she should be responsible for paying that bill because that’s what the divorce decree said regardless of the fact that the person filed for bankruptcy protection. The divorce court is likely going to order that filing spouse to continue to pay the obligation that he or she said that they would pay during the divorce decree. Otherwise, people could just accept certain responsibility in a divorce decree and then quickly run and file Chapter 7 bankruptcy to eliminate the debt. This does eliminates the debt as to the creditor, however the remaining spouse or ex- spouse in this case, is still going to be responsible for that debt and he or she has the right to bring the other party into divorce court again and make them start paying on it.