Should You File for Bankruptcy Separately or Jointly With Your Spouse in North Carolina?

Bankruptcy Lawyer Bryan W. Stone answers the question: “Does my spouse have to file bankruptcy if I do?”


Divorce and separation are common reasons why people file for bankruptcy, according to a 2019 study. Can one spouse file for bankruptcy without the other in North Carolina? Can you choose between a joint and individual bankruptcy filing if you are married?

holding-hands-Charlotte-Monroe-Mooresville-Bankruptcy-Lawyer-300x192In North Carolina, you can file for bankruptcy either together with your spouse or separately. It is advised to consult with a Charlotte bankruptcy attorney to determine whether it makes sense to file for bankruptcy jointly or separately in your particular situation.

Previously, we discussed whether you should file for bankruptcy before or after divorce in North Carolina.


You can File for Bankruptcy Separately, but Should You?

Under North Carolina’s bankruptcy law, married couples have the option of filing for bankruptcy jointly or separately. There are several benefits of filing a joint bankruptcy when you are married:

  • Filing a joint bankruptcy case for both spouses would cost less than filing two separate cases;
  • Married couples who choose to file for bankruptcy jointly can benefit from an “automatic stay,” a court order that immediately stops all collection activities and civil lawsuits filed against both partners; and
  • Marital debt held jointly could be discharged through a joint bankruptcy filing.

However, you also have the option of filing for bankruptcy separately without your spouse. When one spouse files a separate bankruptcy petition, only the petitioner spouse will benefit from an automatic stay to stop collection actions, and only their separate debt incurred in their name will be discharged. Meanwhile, the non-filing spouse could still be liable for any marital debt.

Filing separately may makes sense when only one spouse incurred debt alone, and there is no jointly-held debt. Otherwise, spouses usually go for a jointly-filed bankruptcy.


Things to Consider Before Filing for Bankruptcy Jointly vs. Separately in North Carolina

Whether you should file for bankruptcy separately or jointly with your spouse often comes down to two questions:

  • How will the bankruptcy filing affect your credit score?
  • Do you have any jointly-held debt?

These are the things to consider before filing for bankruptcy together with your spouse. When one spouse files without their spouse, their jointly-held debt becomes the non-filing spouse’s sole responsibility.

However, keep in mind that filing for bankruptcy jointly will affect the credit score of both spouses. That, in turn, can impact the spouses’ ability to purchase real estate, automobiles, or even start a new business.

A married couple can avoid those negative consequences by keeping one of the spouse’s credit score intact. This can be done by letting one spouse file for bankruptcy separately. Typically, the spouse who incurred more debt files for bankruptcy while the other spouse retains their good credit score.

However, this may not be the best option if both spouses acquired significant marital debt during their marriage. When only one spouse files for bankruptcy, the married couple’s jointly-held debt becomes the responsibility of the spouse who did not file for bankruptcy. Thus, debt collectors would still pursue the non-filing spouse for their marital debt even after the bankruptcy filing.

It is advised to contact a knowledgeable bankruptcy attorney in North Carolina to determine whether you should file separately or jointly in your particular situation. Contact our results-driven lawyers at Arnold & Smith, PLLC, to schedule a consultation. Call our lawyers at Arnold & Smith, PLLC, at (704) 370-2828 to evaluate your options or fill out our contact form. Now taking cases throughout North Carolina with offices in Uptown Charlotte, Mooresville and Monroe.






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Bankruptcy and Divorce: Which Comes First?

Filing For Bankruptcy When Married

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