Can I Discharge My Deceased Spouse’s Debts in Bankruptcy?

Can I Discharge My Deceased Spouse’s Debts in Bankruptcy?

Many people who have lost a spouse face a mountain of bills that can financially overwhelm them. If this is the case for you, then bankruptcy may be the answer.

Debt Responsibility

small-image-Deceased-spouseDepending on where you live and whether you jointly hold a credit account with your deceased spouse, you may be responsible for the full amount of the debt your spouse owed.  In the case of a co-applicant, you are fully responsible for the debt even if your spouse passes away, and you will be required to make payment or face collections. However, if you’re not a co-applicant and you’re not living in a community property state, you generally are not responsible for your deceased spouse’s debt. However, if you’re in a community property state—Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin—and you own property or other assets, your spouse’s creditors may attempt to go after your deceased spouse’s interest in that asset.

How Bankruptcy Helps

Surviving spouses benefit from filing bankruptcy by doing a few things:

  • Discharging debts in Chapter 7 bankruptcy or repaying them in Chapter 13 bankruptcy. With a Chapter 7 bankruptcy, surviving spouses can emerge with most of their debts discharged. With a Chapter 13 bankruptcy, they will have to repay some of their debts but with a monthly payment that will not overburden them.
  • Protecting a surviving spouse’s assets from their deceased spouse’s creditors. This is especially important if you own property such as a vehicle or home. If you don’t file bankruptcy, creditors may use the courts to seize your spouse’s portion of that asset if it is sold.
  • Securing a spouse’s financial legacy as much as possible. For surviving spouses who have no income or who want to pass on assets to their children and grandchildren, this is a critical protection of bankruptcy.
  • Saving a home from foreclosure. If a deceased spouse leaves behind a large mortgage, repaying it while trying to also repay unsecured debts may be impossible. When filing bankruptcy, many unsecured debts are discharged or restructured, freeing up more money to pay a mortgage.

If you’re widow or widower struggling financially, contact a bankruptcy attorney to find out how you can get debt relief.