Bankruptcy and Spouses. What about my divorce? How will bankruptcy affect my spouse if he refuses to file? What if our debts are truly separate? How will bankruptcy affect the terms of my divorce decree? What if I am planning on getting married soon? What if I am planning on getting divorce soon?

How will bankruptcy affect my spouse if he refuses to file?

If you are married, and living in a community property state like Washington, there can be some complications for your spouse if you file a bankruptcy on your own. Things that you obtained while together and married to your spouse are “community property”, which means that those assets are shared with your spouse. This can include things like bank accounts, houses, cars, furniture and other property. In some bankruptcies, the bankruptcy trustee can take assets like these and sell them to pay creditors.

Debt is also part of a marital community, and both you and your spouse can be held liable for debts you incur while you are married and living together—even if only one spouse’s name is on the debt! This can cause a lot of complications, so it is best to consult with one of our experienced attorneys beforecontemplating a bankruptcy on your own, or if you are planning on getting divorced.

What if our debts are truly separate?

In a community property state like Washington, the only debts that are truly separate are debts that you brought to the marriage (you owed the money before you got married), or debts you incurred while you were separated and not living together. Otherwise, even if your spouse’s name does not appear on the account, the lender can collect against your spouse if he or she does not file bankruptcy too.

How will divorce affect the terms of my divorce decree?

A bankruptcy often stops a divorce, whether you want it to or not. This is especially true if there are a lot of assets or debts that the divorce court has to address. The federal bankruptcy court has the authority to override the divorce court, and this may bring a halt to the divorce proceedings.

It is very important to talk to an experienced bankruptcy attorney ahead of time if you have a lot of debt and are planning on a divorce. Usually we advise people, even both spouses to file bankruptcy before getting a divorce. This is because under new changes in the bankruptcy laws, certain debts, if part of a divorce order, cannot be discharged in a chapter 7 bankruptcy if your ex-spouse objects. These kinds of debts can be discharged in a chapter 13 bankruptcy—but not everyone qualifies for a chapter 13.

But it can go the other way, too. In other situations, if you discharge debt in a bankruptcy before the divorce, the divorce court may consider that you now have extra income to pay more alimony or child support. So it is best to get our advice to help you through the process.

What if I am planning on getting married soon?

Many people ask us to file a bankruptcy for them before they get married. This is because if you are married, you have to list your husband or wife’s income and other information, and it brings them into the case. It also may affect their credit more if they are married to you when you file. If you do not make much money, but your fiancé makes a very good living, this may force you to do a chapter 13 payment plan instead. Even if you get married after you file, there will be a hearing a month later where you will have to tell the bankruptcy trustee of any significant changes. If you suddenly have the means to pay all or part of your debts, this may cause complications, so we advise you talk to us right away if you are planning on getting married, and are contemplating a bankruptcy too.

If your fiancé has a lot of debt and does not make a lot of money, you may want to get married and then file bankruptcy together to simplify the process.

What if I am planning on getting divorced soon?

It is important to talk to one of our attorneys right away to see if there will be complications. As discussed above, a bankruptcy can stop the divorce whether you want it to or not, it can be disaster if you have a family court order that requires you to pay certain debts (these will often not be dischargeable in bankruptcy), or may result in you paying more child support or alimony .

Also, if you may be entitled to an equalization award, which gives you a certain amount of money or property, the bankruptcy trustee may be able to take it! So make sure to talk to us first.