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Say you are in a situation where you and your spouse have been left with debt that you cannot pay back. Perhaps this debt is listed under a joint account, or in other words, both of your names are on the contract and you have both agreed to be legally responsible for this debt. If you feel that there is no way out other than to file for bankruptcy, do both of you have to declare bankruptcy, or just one of you?

There are several situations in which you can do either one or the other. Joint accounts, seperate accounts, divorces, separations, and debts incurred prior to marriage are some of the things that affect the decision of whether or not to file together or separately. Here are a few of those circumstances.

First of all, you are usually not obligated to file together. You are usually not obligated to file alone, either. The only catch is, that if you want to file together, both spouses have to agree to do so, otherwise you must file individually.

1. Separation

If you and your spouse are separated, you do not have to file together. However, if your accounts to which you are indebted are joint, or in both of your names, you will probably want to. If you are separated and your spouse has debts that they want you to go bankrupt with them for, you don’t have to because it’s technically not your debt, and therefore you will not be obligated to pay for it just because your spouse cannot.

2. Debt Incurred Before Marriage

If your spouse was in debt before you got married, you are not obligated to pay for their debt, ever. However, if you choose to add your name to the contract, making you a cosigner, then you are obligated. This makes it a joint account for which you are also accountable for.

3. Joint Accounts

If you are still together and you have a joint account to which you owe money, you are both legally responsible to pay back the money that was borrowed. Whether it be a loan, mortgage, or credit card account, you are both under the same obligations. If you have no other way out except bankruptcy, filing for it jointly, just as you filed for the credit account jointly, will be your wisest move.

Because you are both obligated under the contract to pay the debt, you want protection from that debt for both of you. If you file for bankruptcy individually, the spouse that filed will be the only one relieved of that debt, while the other will still be hounded by creditors and collection agencies to pay. Filing together will hurt both of your credit reports, but it will protect you both from the responsibility of paying off the debt.