This is one of my most popular questions I have from spouses who come to see me to file for bankruptcy protection. Many of the married couples have signed jointly on all their debts to include their mortgages. In their situation, it is usually my advice that they both file since they are both jointly signed on the debts and therefore are both responsible on all the debts.

The difficult decision for spouses to make is when one Debtor is on the mortgage and a majority of the credit card debt and the other spouse is only a small portion of the debt. Since we are not in a community property state (spouses are jointly responsible for debts), spouses are only responsible for debts in their name.

Many times spouses can file Chapter 13 bankruptcy petitions and leave one spouse off the petition in order to be able to obtain loans if needed while the other spouse is in the Chapter 13. Let me give an example of how this works in a hypothecial situation. A married couple has a jointly owned house with a mortgage they are behind on. The couple has $30K of credit card debt but almost all the credit card debt is in the husband’s name. In this situation, the couple can still save their home from foreclosure by having the only the husband file for the Chapter 13 bankruptcy since the wife is only on a small portion of the credit card debt. The mortgage company cannot foreclose on the house due to the Chapter 13 bankruptcy even though one of the signers of the mortgage didn’t file. The bankruptcy co-debtor stay protects the non-filing spouse from being foreclosed on as long as the husband meets his obligations in the Chapter 13.

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