If I File for Bankruptcy, Should My Spouse Also File?


If you have considered filing for Chapter 7 or Chapter 13 bankruptcy, you may be wondering whether or not your spouse will be affected. When you file in a community property state like Arizona, the answer is most likely going to be yes. Filing for bankruptcy requires you to disclose all of your assets and liabilities, which includes all of the assets and property that has been acquired over the course of your marriage.

Community property assets may include any vehicles, houses, debts, medical bills or credit card bills that were acquired during your marriage. If your spouse is not included in your bankruptcy, a creditor could sue you and/or your spouse for any debts that were not included when you filed. For this reason, it is usually recommended that you also include your spouse’s debts when you file for bankruptcy.

What if my name is not included on my spouse’s debt?

When you are married, all debts are shared between you and your spouse. Even if your name is not directly associated with certain debts (i.e. medical bills or credit card debt), you are just as liable for repaying them as your spouse. You may not even know that your spouse has signed up for certain credit cards that have now incurred debt, but unfortunately, that does not make you any less liable.

Benefits of Filing for Bankruptcy with Your Spouse

Since Arizona is a community property state, most couples will decide to file for bankruptcy together. Not only is it more cost-effective, but it can also get rid of your debts more effectively. Some individuals think that excluding their spouse from the bankruptcy would help them to quality for Chapter 7, but this is not true. Both spouses’ income would be included in the total household income in the means test.

One significant benefit to filing jointly, however, is that married couples are allowed to double certain property exemptions—meaning that you may be able to keep more of your property. State exemptions account for assets like your home, vehicles, insurance benefits and personal property, and many of them allow for “doubling” when a married couple files together (except for the homestead exemption).

Some of the most important property exemptions include:

  • Bank Accounts: You can exempt up to $300 in one bank account
  • Your Home: You can exempt up to $150,000 per married couple
  • Motor Vehicles: You can exempt $6,000 in one or more vehicles
  • Wages: You can exempt up to 25% of your earnings each week
  • Furniture: You can exempt up to $6,000 in furniture & appliances
  • Clothing: You can exempt up to $500 in clothing per person

How does "doubling" work for married couples?

When spouses file for bankruptcy together in Arizona, many of the property exemptions listed above can be doubled—one important exception to this being their house. If a specific exemption allows for doubling, each spouse would be able to claim the full amount of the exemption—which means that, when combined, they would be able to exempt double the amount of equity for each of these assets.

Discuss Your Options in a Free Initial Consultation

If you still have questions about the difference between filing individually and filing with your spouse, we encourage you to schedule a free, no-obligation consultation with our Phoenix bankruptcy lawyer. Leonard V. Sominsky, ESQ., PC has been handling bankruptcy cases throughout the state since 2000, so you can count on him to provide the honest, knowledgeable and professional advice that you need.

We return all calls within 24 to 48 hours! Call today to set up your free consultation or fill out a complimentary case evaluation form online.