Legal Question in Bankruptcy in New Jersey

Re: One Spouse wants to file for bankruptcy the other doesn't

The spouse who files for Chapter 7 relief may well be discharged of the credit card debt in the bankruptcy case, while the spouse who does not file for bankruptcy relief will not benefit from such a discharge. One alternative to bankruptcy might be to negotiate a reduction in the balances, interest rates, etc. with the credit card companies. Note that because the two are married to one another, the practical effect of one spouse remaining obligated on the joint credit card debt by not proceeding with a bankruptcy filing may be to minimize the benefit derived by reason of the other spouse being discharged of the same debt in bankruptcy. There is no requirement that both spouses file for bankruptcy, either individually or jointly. There may be very good reasons for one spouse to file, and the other not to file. If you would like to discuss the matter in greater detail, feel free to contact my office at (973)664-1090.

Re: One Spouse wants to file for bankruptcy the other doesn't

When the accounts are jointly held by husband and wife then each of them are responsible for the payment of the debts. Thus, if one spouse files for bankruptcy and the other doesn't, then the credit card companies can still pursue the non-debtor spouse (the one who doesn't file for bankruptcy) for the full amount of the debts. Since the money ultimately comes out of the same pocket, there may not be any benefit derived by just one spouse filing for bankruptcy. Obviously, there may be situations where one spouse is reluctant to file bankruptcy. This usually occurs in situations where title to real estate may be held by one spouse, but not the other. Also, when there are implications of divorce one spouse may not want to file bankruptcy if the majority of the debt was incurred by the other spouse. Every situation is different.

There is no requirement that both spouses file a joint petition. Thus, the husband may file on his own without the wife, or vice versa. If the spouse who doesn't initially file changes his/her mind, he/she can always file their own independent bankruptcy petition. In that situation, however, the couple would be spending two (2) court filing fees of $200 each plus two (2) attorney's fees. Barring any complicated situations, the more prudent approach may be for both spouses to file a joint bankruptcy petition.

If you have any additional questions, I may be reached at (201) 498-0400. Otherwise, good luck with your decision.