You may be wondering if a husband or wife can file bankruptcy in Pennsylvania
and leave their spouse with the debt, especially if you’re getting
divorced. Pennsylvania is an “equitable distribution” state. So, unlike
community property states, such as California and Nevada, spouses are
not automatically responsible for their spouse’s debts.
Can one spouse file bankruptcy without the other in Pennsylvania? Absolutely,
it happens all the time especially in the context of a divorce. Suppose
it’s your spouse who wants to file bankruptcy before or during the
divorce. If he or she files a Chapter 7 for example, and gets a discharge
before the divorce is final, it should have little to no effect on you
assuming the discharged debt was in your spouse’s name alone.
What If the Debt is in Your Name Too?
Let’s say you and your spouse have joint debt, such as credit card
debt with both of your names on it. If your spouse files a Chapter 7 and
the joint debt is discharged, it does not absolve you of your obligation
at all. In other words, your spouse can file Chapter 7 and all joint debts
can be included, but you can be held liable for the full amount while
your spouse is off the hook!
If you have a lot of marital debt, you may want to consider filing bankruptcy
before the divorce is finalized, particularly if you qualify for a Chapter
7 bankruptcy. But it’s not that simple. You have to weigh your options.
Not everyone qualifies for a Chapter 7 while married; some debtors have
to wait until they’re single due to their income. Also, a lot of
couples considering a Chapter 13 don’t want to delay their divorce
for 3 to 5 years while paying off a Chapter 13 bankruptcy repayment plan.
So, you’ll want to discuss the following issues with a divorce lawyer
before making a decision: 1) the type of debt you have, 2) your income,
and 3) whether you should file bankruptcy before or after the divorce.
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