If I'm married, do we both have to file for bankruptcy together?

The answer to that question depends on many factors such as the level of income of both parties, and whether debts are joint debts.

If one spouse accumulated the debt prior to marriage, then he/she may file without involving the other spouse. However if the debt is jointly held, then both will have to file together in order to discharge the debt obligation.

If one spouse does not want to involve the other due to credit rating issues, take heed, because the non-filing spouse’s income will be included in the calculations in determining whether a Chapter 7 filing is appropriate.

If both parties’ incomes fall under the state median income, then the filer will qualify with no presumption of abuse, meaning that he/she will not be subject to the means test that he/she qualifies for a Chapter 7 filing. The spouse’s entire income is not included in the calculations however and only the portion that is attributed to household expenses will be considered as income. For example, if the spouse makes payments toward his/her personal expenses such as a car loan, insurance, or student loans, then all those expenses are deducted from the total income and the left-over portion is added to the filer’s income.

The ability to determine whether one or both spouses should file is complicated and carefully measured steps should be taken before filing. Contact a bankruptcy lawyer in the Boston area for a free consultation at (617) 273-5110.