Whether you are newly married or not, you may be worried about how filing for bankruptcy will affect your spouse. A spouse is typically not responsible for the other spouse’s debts. But even if you file for bankruptcy individually, there may be consequences for your spouse. This will largely depend on if you live in a community or common law property state.

What does this mean in California?

California is a community property state, which means that most property that you acquire during your marriage is owned equally by both spouses. This is the case no matter who appears on the title.

What does this mean if you file for bankruptcy?

Basically, all community property will become part of your bankruptcy even if you file as an individual. However, each situation will vary based on what property and assets are held by each spouse. It will also depend on which chapter of bankruptcy you decide to file under. You will need to speak with an attorney to find out if you have enough exemptions to protect all your community property or any other individually held items which may be considered a community asset.

What should you do first?

The first step you should take is to make a list of all your debts. Look to see which spouse holds much of the debt. If you find that one spouse holds most of the debt, you may want to consider an individual filing. If you decide to file individually, only your debts will be discharged.

So, if you and your spouse have joint debts, your spouse will still be fully responsible for them after your bankruptcy is discharged. You may still be required to list any property that is held separately. This may occur so that the trustee can verify that the property is not held jointly. Again, this is something a professional bankruptcy attorney will go over with you in detail based on your situation.

It is important to remember that a bankruptcy will remain on the filing spouse’s credit score for seven to ten years. However, this will depend under which chapter you file. But your credit can be repaired and filing for bankruptcy may be the best option to stop your debt from continuing to grow. If you file individually and your spouse sees any resulting dips in his/her credit score after your bankruptcy, he/she will need to contact the credit reporting agencies immediately.

If you and/or your spouse are considering filing for bankruptcy, you will want to make sure that you speak with a professional bankruptcy attorney to review your unique situation. This will provide you with the best information as to what options will work best for you and your spouse. Are you still unsure what to do? Schedule a consultation today to find out what options will work best for you.