It is a myth that both spouses must filed for bankruptcy together. One spouse can file for bankruptcy.
However, it might be better for both spouses to file bankruptcy jointly. If one spouse file for bankruptcy, the non-filing spouse does not get the protection of automatic stay or bankruptcy discharge.
If both spouses are jointly liable to a creditor, the bankruptcy discharge of one spouse does not eliminate the liability of the non-filing spouse from paying the debt.
If both spouses own property together, aka community properties, the entire or both halves of the community properties and the filing spouse’s separate properties are included in the bankruptcy estate and might be used to pay creditors if they are not exempt by the applicable state law. To determine if you can keep your properties when filing for bankruptcy, you should consult Muoi Chea Bankruptcy Attorney in Sacramento, Stockton, and Fairfield, California to provide Chapter 13 and 7 Bankruptcy representation for residents throughout Northern and Southern California.
When one spouse file for bankruptcy, the community properties are protected by the filing spouse’s bankruptcy discharge. 11 U.S.C. 524. This means that the creditors of non-filing spouse can only collect from the non-filing spouse’s separate property. According the California law, separate property is property obtained before marriage, by gift, or by inheritance. Beware some creditors may try to obtain an order for wage garnishment or bank levy against non-filing spouse. If the non-filing spouse has significant debt, non-filing spouse should consider filing for bankruptcy.