No. Just because you are married doesn’t mean you have to file a joint bankruptcy. If one spouse has the majority of debt in his/her name, just that spouse can file bankruptcy. Many married couples have the debt in only one of the spouse’s names just in case something happens in the future; such as loss of employment or health issues. This allows only one spouse to file bankruptcy and the other spouse can maintain good credit.
However, when filing either a Chapter 7 or Chapter 13 bankruptcy, both spouses income is considered. For example, to be eligible for a Chapter 7 bankruptcy there is a 2 part test. First, there is the “means test”. This subjects debtors to an income based test. Both spouses income is considered. If the household income (both husband and wife) is below the state’s median income, then the debtor is not subject to the means test. Even if the debtor passes the means test, the debtor still has to pass a second test known as the “abusive test”. The United States Trustee or any creditor can move to have the case dismissed. The bankruptcy Court could dismiss the case if the Court finds that the debtor has the ability to pay back a significant portion of the unsecured debts. This is determined by looking at what the monthly income will be after filing bankruptcy and what the household expenses are. Both spouse’s income and expenses are considered.
In a Chapter 13, the debtor must list all income, debt, personal property, and monthly expenditures. The amount of the plan payment is based upon the debtor’s disposable income. For example, after the debtor lists all household income and household monthly expenditures (utility bill, water bill, food, clothing expenses, rent/mortgage, phone bill, etc.) whatever is left over is the debtor’s disposable income. As with Chapter 7, both spouse’s income and expenses are considered to determine the plan payment.