Can One Spouse File Independently of the Other?
If you’re married and facing financial challenges, you may wonder whether you have to include your spouse as a party in the event you decide to file for bankruptcy. What if your spouse owned a house with a mortgage on it at the time of your marriage and never re-titled the property to include you? Can you file individually and keep your spouse’s assets out of the bankruptcy filing? In Texas, that depends.
Texas follows the legal principle of “community property,” which means that almost all debts incurred during the course of a marriage are considered common obligations and the responsibility of both parties. Typically, the only exceptions are debts tied to what is deemed to be separate property. Separate property generally falls into two categories:
- Property owned or claimed before marriage; and
- Property acquired during marriage through a gift or inheritance.
When property owned before marriage is associated with a debt (i.e., the property is still being paid for over time), the determination of whether the property is joint property or community property depends on whether a significant portion of the debt was paid before the parties were married. For example, if one spouse is 19 years into a 20-year mortgage at the time of marriage, the mortgaged property is likely to be deemed separate property. If, on the other hand, a spouse is only one year into paying a mortgage at the time of marriage, and then mortgage payments are made for several years during marriage, the property is likely to be considered community property. In that case, the mortgage is a considered a joint debt—even though only one spouse is on the deed and note—and both parties are responsible.
Accordingly, if you file for bankruptcy protection in Texas and include joint debts on community property, then your spouse must be a party to the bankruptcy. If the only debts included in the bankruptcy are your own separate debts, your spouse does not need to be included in the petition.
Contact an Experienced Rockwall, Texas, Bankruptcy Attorney
At the Law Offices of Carrie Weir, all potential clients are entitled to a free initial consultation. I am currently communicating with clients by phone, text message, or videoconference. To arrange an appointment, contact my office online or call 972-772-3083. I handle personal bankruptcy filings throughout Rockwall County, Texas, including the cities of Rockwall, Heath, Greenville, Lavon, Wylie, Mesquite, and Rowlett.
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