Marital Status and Bankruptcy Filings
A debtor who is married is permitted to file bankruptcy individually or with a spouse. No individual is required to file a voluntary bankruptcy simply because their spouse files. A couple who is separated can still file a joint bankruptcy petition. A married couple is permitted to file a joint bankruptcy case and then divorce during the bankruptcy case. It is very rare that a married couple that is separated or strongly considering separation should file a joint chapter 13 case. The primary benefit of a joint filing is saving on fees and cost. There is rarely a substantive benefit to a joint bankruptcy filing that cannot be obtained through separate filings. A joint filing may have significant downsides as it relates to means testing calculations. Means testing helps to determine presumptive eligibility for chapter 7 debtors whose debts are primarily consumer in nature and it determines the presumptive repayment amount for chapter 13 cases. In general the non-filing spouse is more likely to impact the bankruptcy rather than the bankruptcy impact the non-filing spouse. However, there are significant exceptions to that general statement. The most common reason for only one spouse is file is that the debt between the married couple is lopsided.