• Bankruptcy for couples is typically a last resort to fix a dire financial situation.ragged purse image by Oleg Kulakov from Fotolia.com
  
  United States Bankruptcy Code allows small business owners to file one of three types of bankruptcies: Chapter 7, 11 or 13. Depending on how you registered your business and the types of debts accumulated, the filer's spouse may not need to be involved in the filing in any chapter of bankruptcy. If you are not incorporated as an LLC, INC or S-Corp, your personal assets are at risk in bankruptcy. Chapter 11 costs more for small business owners, so consult a lawyer to determine the best option for you.
  
  

Joint Debt in Bankruptcies

• Joint debts are common for married couples as they tend to join their finances and credit usage. This means that unless both spouses are prepared to file bankruptcy, the non-filing spouse can be held financially responsible for any unpaid debt held by both names.
  
  The Bankruptcy Network cautions couples to understand the applicable laws in their state before deciding how to file. If jointly held debts are overwhelming the couple, both spouses should file forms. The added bonus is that only one filing fee will be paid as the cases will be combined (as defined by Section 302(a) of the US Bankruptcy Code).
  
  

Safeguard the Non-filing Spouse

• As a business owner many of the debts you are filing should only be in your name. If you kept your business afloat with personal lines of credit jointly held by your spouse, she may have no choice but to file with you.
  
  Couples who keep their finances separate from each other may have a few options to safe guard one another. Credit cards where a spouse was only authorized to use the account can be updated to remove her (leaving the debt solely to the filer). A spouse with a decent credit score or a cosigner could transfer jointly held debts (like a car loan) to an account only in their name to avoid it being added to the bankruptcy.
  
  

Chapter 7 Bankruptcy

• The United States Courts refer to Chapter 7 as the "liquidation" bankruptcy. It is available to individuals, partnerships and corporations. Expert law explains that you must prove you cannot pay back 25 percent of your "non priority unsecured debts" (such as credit cards) to be eligible. Any assets like luxury items may be incorporated into this calculation.
  
  In some situations your spouse's income may be included to determine your eligibility. If successful you will be cleared of all debts (except for those that are non-dischargeable such as student loans, back child support, judgments and tax payments). In most cases you should be able to keep your house and a car. If your spouse is not jointly liable for a majority of the debts included in your filing they do not need to file with you.
  
  

Chapter 13 Bankruptcy

• If you are an individual, sole proprietor or an unincorporated business with secured debts of less than $1,081,400 and unsecured debts of $360,475 you may file Chapter 13. This does not discharge the debts but creates an agreement with creditors to establish a payment plan (and possibly a reduced amount to pay back) over a five year period.
  
  This may be an ideal option to protect your spouse as result of section 11 U.S.C. § 1301(a) of the United States Bankruptcy Code. It prevents the co-debtor (your spouse) from collection attempts by creditors in most situations. Chapter 13 also allows couples to prevent foreclosure on their home by providing additional time to catch up on past due payments.