Q: What happens if only one spouse in a relationship files for bankruptcy?
A: The non-filing spouse is not a debtor in the case, but may be affected. His or her income is called for to be disclosed in Schedule I. Property jointly-owned with the debtor could potentially be sold. He or she may be subject to questioning. The effect on the non-filing spouse depends upon the situation.
A: It depends upon whether the case is filed as a Chapter 7 or Chapter 13, whether or not they reside together and the extent of their joint assets.
The non-filing spouse's debts are not discharged and there shouldn't be any effect on the non-filing spouse's credit, so long as payments continue on joint debts.
If the debtor files a Chapter 7 case, property that the debtor and non-debtor own jointly, could be sold by the Trustee to satisfy creditor's claims. The non-filing spouse would be entitle to keep her share, but the debtor's share could be used to pay creditors.
If the debtor files a Chapter 13 Reorganization Plan, and if they live together, the non-filing spouse's income and contributions to joint household expenses will have to be disclosed in the bankruptcy case and could affect the amount of the debtor's payments under the plan.
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