Married Filing Bankruptcy Separately – November 3rd, 2016 Interview


Hello everyone, we’re being joined by our friend, attorney Pete Moak, and we’re going to continue to talk bankruptcy matters. Today we’re going to talk about married persons filing bankruptcy without their spouse. If you were thinking that this may not be possible to do, well he’s going to share with you if it’s possible and if it is possible how it’s possible. Welcome back Pete, how are you?

Pete Moak:

I’m doing wonderful thank you very much Katherine. Yes this is an important topic, one that comes up often when I meet with people who are married because they sometimes have situations where both spouses don’t want to file bankruptcy, or maybe one spouse is disqualified from filing bankruptcy because they filed previously, less than eight years before. This topic does come up and there are some things that people need to understand and as they try to make the decision about whether or not to go forward with filing their bankruptcy, and whether or not they need to file with their spouse or whether they have the option of filing without their spouse.

Of course, the answer is that in bankruptcy each debtor is entitled, according to the law, to file for bankruptcy protection. The law does allow people who are married to file a joint case paying only one filing fee to the court. It’s actually two different debtors that are allowed to file under one case number even though, under the law, they are two separate debtors. They can choose to file without their spouse.

Now there are some consequences that people need to be thinking about before they make that decision because the reason that they may have for filing alone may not be able to be accomplished. It is true that if both spouses file bankruptcy together that they will have greater protection from their creditors than if they file alone or one of them files and the other one doesn’t. The reason that there is a consideration that people may want to file alone is because sometimes, as I mentioned, one spouse is not eligible to file bankruptcy and the other spouse may think that they’re not eligible to because they may wrongfully think they have to file together but they don’t. If your spouse is not eligible to file bankruptcy you still may be eligible, and if you benefit from filing bankruptcy then that’s an obvious choice or decision that you should do so and not be prevented from filing simply because your spouse is not qualified to file.

Sometimes people file bankruptcy alone because the two people just recently got married and the debts of one of the spouses is from debts that were incurred prior to their getting married. That’s a good reason for only that spouse that has the debt that was incurred prior to their getting married to file bankruptcy alone. The other spouse doesn’t have to file bankruptcy, maybe the debt that he incurred, or her and I don’t know which one I’m going to use in this particular scenario, that it was the wife who had the previous debts that were incurred prior to their getting married and the husband didn’t need to file because he was pretty well current on all of the debts that he had incurred prior to filing bankruptcy. Even though he may be eligible, he may choose that it’s not necessary for him to file bankruptcy.

Click Here to Schedule an Appointment

If he doesn’t file bankruptcy and she doesn’t either, there may come a time when the creditors who were creditors of the wife will file a lawsuit and because they are living in a community property state and Arizona is a community property state and I practice law in Arizona, so if someone is married and they had a creditor from before they got married, when that creditor goes to try to collect the debt and wants to file a lawsuit they have to sue both parties because now they’re married. If a person is married, regardless of whether the debt was incurred before they got married or afterwards, the creditor has to sue both of them in order to get a judgement that is enforceable against the community estate.

When a person gets married in a community property state or they got married somewhere else and they moved to a community property state then a creditor has to sue both spouses in order to be able to collect any money from the debtors that is part of their community estate. Then the wages that they earn and the assets that they acquire during the marriage are going to be community assets. A creditor is only able to collect from the community estate if the creditor sued both parties. If the husband in my scenario did not file bankruptcy and the wife didn’t file bankruptcy either ,even though she may need to and a creditor that has a debt that the wife owed from before she was married, what could happen is that the creditor ends up filing a lawsuit against both parties and gets a judgement against both parties. Then he wants to garnish the husband’s wages. Would he be allowed to do so, and the answer is yes he would be allowed.

The creditor could garnish the husband’s wages because the husband did not answer the lawsuit and claim that that debt was not a debt of the community and the only part of the debt that would need to be paid is the contribution that the wife is making to the community. In other words if the creditor sued both parties and wanted to collect the debt he could garnish the wife’s wages but not the husband’s wages, but that’s going to require that the parties actually answer the lawsuit and bring to the judge’s attention that that was the situation. Otherwise the judge would allow the judgement against both parties.

Typically speaking I recommend that both spouses file bankruptcy together if they are eligible to file bankruptcy because they both get extra protection. Another thing that can sometimes happen is that you have both spouses qualify, one spouse files bankruptcy and the reason that they give is that they think that that’s going to protect the non-filing spouses credit and of course that may not happen because if the husband, in this particular case he’s going to be the one that’s not filing. If the husband doesn’t file bankruptcy but yet he owes some of the debts that are not being paid by the wife then what could happen is that that creditor will report to the credit bureaus that the debt is not being paid and it will damage the husband’s credit even though he didn’t file bankruptcy. Continuing to not pay a debt that you owe will cause damage to your credit and you’re thinking that not filing bankruptcy protects that person’s credit and of course it’s causing harm to the credit if the debt is not being paid in accordance with the terms of the agreement.

Sometimes people think that, the husband here in this particular scenario, shouldn’t file because it would damage his credit. Well filing bankruptcy does damage ones credit to some extent but it’s a temporary thing and it stops any of the creditors from reporting that the debts aren’t being paid according to the plan as they report to the credit bureaus. If the husband doesn’t file can the creditor still report to the credit bureaus that the debts are not being paid and the answer is yes, they can. By reporting that failure to pay the debts to the credit bureaus, the husband’s credit score is going to be damaged. If the reason is I want to protect my husband’s credit that’s the reason he’s not going to file the answer is well that’s not a very good reason unless the husband plans to continue to make payments on the debts that he’s responsible for paying, that is were incurred by him and he’s legally obligated to pay those debts.

Another thing that a person needs to understand is that if the two spouses divorce or one of the spouses dies then the community estate ceases to exist, and therefore the non-filing spouse, in this particular scenario we’re going to assume that it was the non-filing spouse that survives the death of the other spouse or that the two spouses divorce then of course the creditor can collect from the non-filing spouse by garnishing that spouses wages that were earned after the divorce. Because now there’s no protection because the community estate doesn’t exist. You see when a person who is married files bankruptcy then the bankruptcy protects the community estate as well as the individual debtor who filed bankruptcy. If the debts are community debts then the filing of the bankruptcy will give protection by not allowing that creditor to collect any assets from the community.

Now what constitutes assets of the community is based upon community property law. Any assets that were acquired during the marriage by the people who are married will be a community asset, so if somebody buys a house, somebody buys a car, somebody acquires some asset during the time that they’re married then that asset is a community asset unless the purchase was made with money that was earned prior to their marriage. Of course that’s going to be a difficult situation to prove unless that money was sequestered in some way and identified as being assets that were sole and separate to that spouse.

Now the community estate is protected but only so long as the community estate exists. Like I said, if they divorce or if one spouse dies then the creditor can go ahead and collect the debt by suing the non-filing spouse and getting a judgement and garnishing that person’s wages. Those are some things that a person needs to take into consideration if they’re going to file bankruptcy and think that they’re going to benefit with only one spouse filing. The question then is does the non-filing spouse own any assets that are not community assets? In this particular scenario we were talking about the husband being the non-filing spouse and the husband has some assets that he owned. Let’s say he had some property that he owned before they got married, well that property is referred to as the husband’s sole and separate property. If the husband doesn’t file bankruptcy and the husband has a creditor that is able to collect the debt from him then that creditor can file a lawsuit, get a judgement and place lien on that property that was owned by the husband as his sole and separate property. Because the husband didn’t file bankruptcy the assets that he owned that were his sole and separate assets are not protected by the bankruptcy.

All of those things taken into consideration a person who is deciding about whether or not to file individually or to file jointly with their spouse needs to have the guidance of a knowledgeable attorney such as the Moak Law Firm and we can make sure that they’re making the decision wisely. Very good?

Click Here to Schedule an Appointment

Awesome, whenever you bring this information you answer it perfectly anyway, so I’m trying not to make too much noise while I’m listening because I’m like oh my, yes. Those are things to consider especially the scenario of the couple just getting married and the other person bringing debt in that is fair, you need to file bankruptcy by yourself, that’s not a we’re in this together because that was before us. That was a ah-ha for me just listening to that, but every time you come you educate us so well on the topics and you’ve shared your information so they know how to get in touch with you if they have further probing they need to do on their individual situation. Pete I want to say thank you once again for stopping by, just needs to be said, and sharing your wealth of information.

Pete Moak:

Well that’s what we do. Of course we always want to visit with the person individually to let them know what their options are and to give them some guidance regarding what may be things that they didn’t consider ahead of time. Anybody who’s thinking about that they need to have some relief from creditors that are creditors that they owe money to that they can’t afford to pay we’re here for them, schedule an appointment, we can meet with the couple or with an individual and give them their options. Give us a call at The Moak Law Firm at 480-755-8000 extension 1, or go to my website at


Awesome, thank you. Until next time, have a wonderful day.

Pete Moak:

All right, thank you, buh-bye.


Online Case Evaluation