Yes and no. This happens to be one of those situations in which a ‘yes and no’ answer is appropriate. There are very specific rules concerning joint debt between a married couple. So if you are planning on filing a Missouri or Illinois bankruptcy, this is a great blog post to read.
To begin with, when you file for bankruptcy, the court requires that you disclose all of your creditors. This means that you must give the name, address, and account number for each entity or person you owe (including an indication of things like amount owed, what kind of debt it is, and whether or not the debt has been passed onto a collection agency). All the creditors are then notified of the fact that you have filed a bankruptcy petition, and they in turn may never try to collect on the debt ever again. At the end of your bankruptcy, all the unsecured creditors (like credit cards, medical bills, payday loans, etc.) are discharged.
So let’s assume that you are married, and you have a few credit cards that you own jointly with your spouse. If you own such a debt jointly with someone (whether it is a spouse or someone else), then both parties are liable for the balance. This means that the creditor can demand payment from either person, and it can sue either party if payments are not made. A ‘joint’ debt means just that: you both own it. If you then decide to file bankruptcy individually (without your spouse), these debts are disclosed (again, because the court requires it). But in this case, only you would be discharged as to the joint debts in question. In other words, the creditors could no longer come after you for the joint debts, but they could still continue to come after your spouse.
For example, if you have a joint credit card with your spouse with a balance of $5,000, and you file an individual St. Louis Chapter 7 bankruptcy, this debt will be discharged as to your ownership interest in the card. The creditor can no longer pursue you on it, and you will no longer be obligated to pay. But because it is jointly owned with your spouse (who did not file a bankruptcy with you), he or she will still be liable on the full $5,000. In this way, it still remains a household debt.
But if you file a Missouri Chapter 7 (or a St. Louis Chapter 13 bankruptcy) jointly with your spouse, the entire debt is knocked for both parties. The affordable St. Louis bankruptcy attorneys at Brinkman & Alter, LLC have been providing quality bankruptcy legal services for years. Our goal is to make sure you receive the best outcome available, get the fresh start / clean slate that you deserve, and do it all at an reasonable price.