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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