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Chicago Bankruptcy Question: Does my spouse have to file for Chapter 7 with me?

Chicago Bankruptcy Question of the Day: Does my spouse have to file for Chapter 7 with me?  The short answer to the question is no, one spouse is not required to file for Chapter 7 bankruptcy protection if the other elects to.  In extremely rare circumstances, both spouses can be forced into an involuntary Chapter 7 bankruptcy, but these cases are so uncommon it is barely worth mentioning.  It may, depending on the facts, make sense for your spouse to do so, however, so it is something that should be discussed between you.

Illinois is not a community property state.  In bankruptcy, this is important because it means that one spouse cannot be held liable for the debts of the other spouse unless they agree to such liability.  You cannot "marry into" the debt of a spouse either.  If only one spouse has significant credit card debts, personal loans, repossessions, etc., then only that spouse should file for Chapter 7 bankruptcy protection. As always, there is an exception to this rule.  When medical bills are incurred while a couple is married, for either spouse or for dependant children, then both spouses are liable for these debts.  This scenario often compels a joint bankruptcy filing.

Now, if both spouses have their own collection of debts and both spouses need to file for Chapter 7 bankruptcy protection, then it almost always makes sense for them to file a together (a joint filing).  By filing jointly, the couple is only required to pay one set of legal fees, expenses and one filing fee.  There are few things worse than one spouse filing for Chapter 7 bankruptcy, then the other spouse electing to file at a later date and having to pay a second set of fees and costs.  Often the logic behind this is to keep one spouse's credit intact, which is a reasonable theory, but this only works if the debts of the non-filing spouse can be paid back within a reasonable period of time.  If this is not possible, it is generally better for both spouses to file and then to rebuild their credit together.

Having the guidance of an experienced Chicago bankruptcy attorney throughout the Chapter 7 process is essential.  It is recommended that both spouses consult with the bankruptcy lawyer together so that all of their options can be presented and informed decision can be made.  At Ledford & Wu, our bankruptcy attorneys are happy to offer a free consultation and will give you a no-nonsense analysis of whether or not you should file for Chapter 7 bankruptcy protection individually or jointly.

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