Legal Question in Bankruptcy in Wisconsin

Bankruptcy Discharge for Non Filing Spouses

Since WI is a community property state, a bankruptcy filing by either spouse will bring all marital property under the jurisdiction of the bankruptcy court. The non-filing spouse, however, will not have the benefit of being able to retain property by claiming it as exempt, and will therefore lose for more in the bankruptcy than they would lose in a joint filing (in which event both spouses can claim exemptions which would allow them to keep certain property). If a bankruptcy discharge is issued, both spouses can benefit from the discharge in WI, because the non-filing spouse's debts are "hypothetically discharged," providing many of the same protections they would have received had they filed. Getting to that point, however, if generally far more painful than if both spouses can cooperate in fling a joint bankruptcy.