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Does Bankruptcy Affect Your Spouse in Michigan?

Thinking about filing for bankruptcy in Michigan?

It’s a big decision, and you might be wondering how it could affect your spouse. After all, marriage often means sharing finances and the consequences of financial decisions.

Thinking about filing for bankruptcy in Michigan?

Bankruptcy in Michigan

A Michigan bankruptcy provides a fresh start for those burdened with overwhelming debt by either liquidating their assets or developing a repayment plan. Similar to other states, bankruptcy in Michigan involves filing a petition in federal court and typically requires the assistance of an experienced bankruptcy attorney.

When it comes to filing for bankruptcy, married couples in Michigan have the option to either file individually or jointly. Filing jointly is often advantageous as it simplifies the process and allows both spouses to address their debts and financial issues simultaneously. Individuals must note that filing individually may be beneficial if one spouse has significant assets or if they wish to protect their separate property.

Another aspect to consider is the impact on credit scores. Filing for bankruptcy will impact the credit score of the person or persons filing. Joint bankruptcy may result in a slightly lower credit score for both spouses, whereas filing individually may protect the credit score of the non-filing spouse unless they are unable to pay the debts remaining. 

There are several benefits to filing for bankruptcy as a married couple in Michigan. It allows both spouses to deal with their debts collectively, providing a unified approach to achieving financial stability. Joint bankruptcy can simplify the process by consolidating assets and debts, making it easier to create a repayment plan.

How Bankruptcy Can Impact Spouses

The non-filing spouse’s debt obligations may be affected by the filing spouse’s bankruptcy. While the debts solely in the name of the filing spouse may be discharged in bankruptcy, joint debts, such as mortgages or credit cards, may remain the responsibility of the non-filing spouse. This means that the non-filing spouse could become solely responsible for repaying the joint debts.

The credit scores of both spouses may be negatively affected. Even if the non-filin[g spouse had a clean credit history before, their credit score may suffer due to the association with the bankrupt spouse. Bankruptcy stays on a person’s credit report for several years, making it challenging to obtain credit or loans in the future.

Bankruptcy can impact joint and separate property. Depending on the type of bankruptcy filed, certain assets may be liquidated to help repay the creditors. If the couple owns the joint property, it may be subject to being sold to satisfy the debts. Some assets may be exempt from liquidation, such as primary residence or retirement accounts, which may offer some protection for the non-filing spouse.

How Bankruptcy Can Impact Spouses

Joint Debts

When filing for bankruptcy, joint debts are considered just like any other debts and are included in the bankruptcy proceedings. This means that if one spouse files for bankruptcy, the joint debts will still be part of the bankruptcy estate and will need to be addressed accordingly.

Even if only one spouse is filing for bankruptcy, both parties can be affected by the outcome. If the joint debts are not discharged or dealt with appropriately within the bankruptcy proceedings, the creditor may still hold the non-filing spouse responsible for repaying the full outstanding amount. 

How Joint Debts Are Treated in Bankruptcy

When one spouse files for bankruptcy, the implications for the other spouse depend on the type of bankruptcy filed.

In a Chapter 7 bankruptcy, joint debts are eligible for discharge, meaning that the individual’s obligation to repay the debt is eliminated. This does not impact the other spouse’s responsibility to repay the debt. The creditor can still pursue the non-filing spouse for the remaining balance

On the other hand, in a Chapter 13 bankruptcy, a repayment plan is created to pay off debts over a period of three to five years. In this scenario, joint debts are included in the payment plan, and both spouses are required to contribute towards the payment of these debts.

If one spouse decides not to include joint debts in the payment plan, the non-filing spouse may still be pursued by the creditors, potentially resulting in credit being affected and potential legal actions.

During bankruptcy proceedings, an automatic stay is issued, which halts all collection activities by creditors. This stay also affects joint debts, preventing creditors from pursuing either spouse for payments.

How Joint Debts Are Treated in Bankruptcy

If you are interested in filing for bankruptcy in Michigan, the experienced attorneys at Frego Law can help guide you through the process and ensure that both spouses are protected financially. Contact Frego Law today. 


Does my spouse's property get affected if I file for bankruptcy in Michigan?

In Michigan, which is not a community property state, your spouse’s individually owned property generally should not be affected if you file for bankruptcy alone. This is especially relevant for property purchased by your spouse with separate funds. Joint assets or property bought during the marriage might be subject to bankruptcy proceedings [1]

Should my spouse and I file for bankruptcy together or separately in Michigan?

The decision to file for bankruptcy jointly or separately depends on various factors, such as whose name the debts are under, whether you have joint property, and the impact on each spouse’s credit. Filing jointly might be beneficial if most debts are shared, but filing individually might be better if most debts belong to one spouse. It’s also important to consider future financial events, such as inheritances or significant changes in income, which might be better protected if spouses file separately. [2]

What happens to joint debts if only one spouse files for bankruptcy?

If you have joint debts with your spouse and you file for bankruptcy, the non-filing spouse will still be responsible for those joint debts. While the filing spouse’s obligation towards the debt might be discharged, creditors can still pursue the non-filing spouse for payment. This rule applies regardless of whether you file under Chapter 7 or Chapter 13 bankruptcy [3]


[1] Bacevice, A. E. (2019, January 30). Will Filing For Chapter 7 Bankruptcy Affect My Spouse? Upsolve.

[2] Will My Bankruptcy Affect My Spouse? (n.d.). Retrieved April 15, 2024, from

[3] Bankruptcy and the Non-Filing Spouse. (n.d.). Retrieved April 1, 2024, from

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