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Bankruptcy Law Blog

Saturday, June 30, 2018

Must Spouses File For Bankruptcy Together?

When you got married, you likely pledged to have and hold one another, for richer or poorer, until death does you part. This is a beautiful sentiment, but is it legally binding? Must you mingle your financial lives to the point that if one of you files for bankruptcy you both will be hauled into court? The answer to this question is every lawyer’s favorite answer — it depends.

Alabama is not a community or marital property state. This means that assets you bring to the marriage remain yours individually unless you retitle them. The same thing goes for debts. Unless you retitle the asset tied to the debt in both of your names, or refinance your debt in both of your names, any debt you bring to the marriage is yours individually.

So, if you or your spouse brought a lot of debt to the marriage, or racked up a bunch of individual debt without the other partner’s knowledge after the marriage, you or your spouse could in theory file for individual bankruptcy.

Although it is possible to file for bankruptcy individually even if you are married, most couples choose to file jointly. Filing jointly allows you both to get a fresh start, and it can help you hold on to assets that the bankruptcy court would otherwise force you to sell off to pay off debts.

In Alabama, each person who files for bankruptcy can exempt $15,500 worth of real property (think houses and land) and $7,750 of personal property (like cars, jewelry, and tools) from the bankruptcy estate. This means creditors are not allowed to go after this property. Couples who file jointly are able to combine their exemptions, and therefore keep $31,000 worth of real property and $15,500 worth of personal property out of the bankruptcy estate. Because they are able to hold on to more assets by filing jointly, most couples choose to do so.

If you have questions about whether you or your spouse should file for bankruptcy, you should not hesitate to talk to an experienced bankruptcy attorney. There is a lot of confusing and misleading financial advice floating about on the internet, so discussing your unique situation with someone that can give you specific, the individualized advice is always a good idea.


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Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”