Joint Bankruptcy Filings
Bankruptcy Options for Married Couples
Spouses facing crippling debt may be able to take advantage of special bankruptcy laws to eliminate their jointly-held debt. Under U.S. bankruptcy law, married couples can file a single bankruptcy petition to cover their debts, whether held together or separately.
But is filing jointly always the right decision? If only one spouse files bankruptcy, will the other spouse's credit be impacted? Will creditors be able to go after a non-filing spouse for debts discharged in the other's bankruptcy? Each case is different, and it may be best to speak with a bankruptcy attorney about your circumstances.
You can connect with a bankruptcy lawyer near you today. Simply fill out the free case review form below or call 877-833-2410 to schedule your free, no-obligation bankruptcy consultation.
Factors in Joint Bankruptcy Filings
Whether or not a married couple should file personal bankruptcy jointly depends on a number of factors. These include:
- Debts: If spouses share debts and only one spouse files bankruptcy, creditors may be able to go after the non-filing spouse to collect on debts even if they have been discharged in bankruptcy. The exception to this is Chapter 13 bankruptcy, which typically protects co-signers on debts.
- Assets: State laws that dictate property ownership in a marriage can come into play during a bankruptcy filing. For example, some states say that property of a married couple is jointly owned 50-50, regardless of who earned the income to purchase it, or who primarily uses it. For example, a car financed with one spouse's income and used by that same spouse to commute to work, or a savings account that is only in one spouses name, may be said to be jointly owned. A single-filing spouse may put the other spouse's assets at risk in bankruptcy.
- Income: If only one spouse intends to file Chapter 7 bankruptcy, the other spouse's income may be used to determine eligibility under the Chapter 7 means test.
If a couple is recently married and has not acquired any new debts since the marriage, a single-filing may make sense. Likewise, if a couple is going through a divorce and has already decided all financial issues, or has a pre-nuptial agreement, filing jointly may not be necessary.
Get the Facts with a Local Bankruptcy Lawyer
If you and/or your spouse are considering bankruptcy as a debt-relief option, the decision to file jointly is a critical one. Bankruptcy protections can provide powerful relief—don't let creditors find loopholes.
Simply fill out our free bankruptcy case review form today to get in touch with an attorney in your area who can answer your questions about bankruptcy.