How to Protect Your Spouse During Bankruptcy
Thinking about filing for bankruptcy but lying awake at night worrying how it will hurt your spouse? You’re not alone. The idea of ruining your spouse’s credit, losing your home, or creating even more strain on your relationship can be paralyzing. Good news: bankruptcy does not have to hurt your partner. With smart planning, you can shield them and keep your family stable. At Pagan Lopez Law, we treat bankruptcy as a fresh start, not a new problem.
Does My Spouse Have to File Too?
Short answer: no. If the debts are only in your name, you can file solo and your spouse stays off the petition. For joint debts, however, your discharge wipes out only your liability. Creditors can still pursue the non-filing spouse (In re Smith, 581 B.R. 910 (Bankr. S.D.N.Y. 2018)). If you own property together (as in tenancy by the entirety, common in New York), each spouse owns the whole asset, not half (EPTL §6-2.2; In re Kambouris, 449 B.R. 867 (Bankr. E.D.N.Y. 2011)). 👉 Related read: What Bankruptcy Can and Can’t Do for You
Chapter 7 vs. Chapter 13: Which Fits Your Family?
| Feature | Chapter 7 “Liquidation” | Chapter 13 “Repayment” |
|---|---|---|
| Eligibility | Must pass the means test under 11 U.S.C. §707(b)(2) | Regular income required (11 U.S.C. §101(30)) |
| Timeline | 3–4 months to discharge | 3–5-year repayment plan |
| Asset impact | Non-exempt assets may be sold by trustee | Keep assets and pay their value via plan |
| Secured debt | Redeem, reaffirm, or surrender collateral | Catch up on arrears and keep collateral |
| Joint filing benefit | Double exemptions per 11 U.S.C. §522(m) and CPLR 5206 | Same doubling applies |
The Means Test: Will You Qualify for Chapter 7?
Congress created the means test to block high-income filers from fast discharges. It compares your past 6 months of household income (including the non-filing spouse’s adjusted share) to the state median. IRS-like deductions apply (see U.S. Trustee Means Test Guidelines 2025). If you fail, you may need to consider Chapter 13 instead.
What the Automatic Stay Means for Couples
Once you file, 11 U.S.C. §362(a) immediately stops most collections—lawsuits, garnishments, foreclosures. However, it usually doesn’t protect your non-filing spouse. Creditors can still pursue them unless you file jointly or the court extends the stay. Some actions (criminal, support obligations, recent taxes) are excluded under §362(b).
Exemptions: Keep Your Home, Car & Retirement
In New York, you can choose federal (§522(d)) or state (CPLR 5205–5206; DCL §282) exemptions.
- Homestead: Up to $204,825 equity in NYC/Long Island, $170,700 in Mid-Hudson/Capital, $102,400 elsewhere (NY DFS 2024)
- Vehicle: $5,500 equity or $13,625 if equipped for a disabled debtor
Joint filers can double these numbers. Plan ahead: convert non-exempt assets legally, but avoid fraudulent transfers (§548, §727(a)(2)). Live in multiple states? The 730-day rule determines which exemptions apply. 👉 Learn more: Chapter 7 Bankruptcy: Key Steps and Differences from Chapter 13
Non-Dischargeable Debts
Bankruptcy doesn’t erase everything:
- Child and spousal support (§523(a)(5))
- Property settlements in divorce (§523(a)(15)), unless Chapter 13 is completed
- Attorney fees tied to support litigation (see In re Rogowski, 462 B.R. 435)
- Recent income taxes (§523(a)(1))
- Student loans unless undue hardship is proven
- Fraud and willful injury debts (§523(a)(2), (6))
Knowing these limits upfront saves heartache later.
Rebuilding Credit — Together
- Check credit reports 30 days after discharge
- Open a secured card for the non-filing spouse
- Pay rent and utilities on time
Most couples see credit improvement within 12 months.
Should We File Together?
Joint filing means one court fee, one timeline, and double exemptions—but both credit reports are affected. Filing separately limits risk but can cost more. New York lets married couples choose either option. Talk to your attorney first.
Key Takeaways
- Filing solo won’t automatically harm your spouse
- Choose the right chapter based on income and goals
- Use exemptions to protect your home, car, retirement
- Know which debts won’t go away
- Start rebuilding your financial future together
Need clarity? Book your free consultation today. Let’s protect what matters most.
Attorney Advertising
Prior results do not guarantee a similar outcome. This post is for informational purposes only and does not constitute legal advice.
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Contact us today to receive complete legal guidance and protect your family’s future.
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