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Marriage and Bankruptcy

This article was prepared by Legal Aid of Northwest Texas and contains material from other resources as well. It contains a general overview of bankruptcy and is not a substitute for direct representation by an attorney.

If I’m married, do my spouse and I both have to file for bankruptcy?

No. But you will have to give information on your bankruptcy papers about your marital status and your joint or separate expenses—even if you are separated. Depending on the circumstances, you may have to reveal or expect to be asked about both your income and your spouse’s income. You will also have to specifically list any debts for which you and your spouse are both responsible—for example, if you both signed for a mortgage or a car note together.

Official Form B101 is the Voluntary Petition for Individuals Filing Bankruptcy. In the instructions for Form B101, it says, “A married couple may file a bankruptcy case together—called a joint case—and in joint cases, these forms use you to ask for information from both debtors.”

For lawyers and judges, the word “may” differs from the word “shall.”  “May” means you are allowed to do something, but you are not required to do something. “Shall” means you must do something; you are required to do it. So when the official form’s instructions say that a married couple may file a bankruptcy case together, it is not required, but it is allowed.

Do the official bankruptcy forms require information about a debtor’s spouse?

Several official bankruptcy forms require information about both the debtor and the debtor’s spouse.

Schedule I is where debtors report their income. The instructions for Schedule I say, “If you are married and your spouse is living with you, include information about your spouse even if your spouse is not filing with you. If you are separated and your spouse is not filing with you, do not include information about your spouse.”

On the Statement of Financial Affairs, both Debtor 1 and Debtor 2’s income (that is, debtor and debtor’s spouse who is filing jointly) must be listed—for the current calendar year, and the two previous calendar years.

What does the "means test" have to do with marital status?

On another form, commonly called the means test (officially the Chapter 7 Statement of Your Current Monthly Income), debtors must state whether they are married, unmarried, or separated. If debtors are separated and not filing with their spouses, debtors must swear under oath that they are not living apart just to dodge the means test requirements. The means test is what helps determine whether a debtor may file under Chapter 7 or Chapter 13.

Do married debtors have to submit their tax returns?

Yes. Debtors must also submit income tax returns, so if those returns were filed jointly, it will show the trustee the joint income received in that tax year by you and your spouse. The Bankruptcy Code says, “The debtor shall provide . . . to the trustee a copy of the Federal income tax return . . . for the most recent tax year.” If a creditor asks for a copy of the tax return, the debtor must provide that tax return to the creditor, too.

If you are married but separated, what do you file?

The instructions for Schedule J, which lists the debtor’s expenses, say, “If you are married and are filing individually, include your non-filing spouse’s expenses unless you are separated.”

If you and your spouse are separated, you can still file a joint bankruptcy case together, but you would have to file another schedule called Schedule J-2, Expenses for Separate Household of Debtor 2. This lists the expenses that a debtor’s spouse has in a separate household.

What sorts of questions will a married-but-separated debtor have to answer?

Such debtors should expect that their tax returns are fair game for questioning under oath by the trustee and the creditors, along with the following topics:

  • The debtor’s income;
  • The debtor’s spouse’s income;
  • The debtor’s marital status;
  • The date of the debtor’s separation from his spouse (if applicable);
  • Whether the debtor has any joint debts with his non-filing spouse;
  • What assets the debtor or his spouse have as separate property or as community property; and
  • Why the debtor chose not to file the case jointly with his spouse.