The marital vows may say “for richer, for poorer,” but when it comes to dealing with debt, you and your spouse need to think carefully about whether to file for bankruptcy separately or together. Both options are available, and you can also limit a bankruptcy filing to just one of you, but it’s important to know all the potential advantages and drawbacks before moving forward, and an experienced bankruptcy attorney is going to be the best source of guidance available.

When you and your spouse meet with a bankruptcy attorney, they will ask you several important questions about the property you own together and separately as well as the debts, each of your credit scores, and your income both separately and combined. Based on your answers,  your attorney will assess whether a Chapter 7 bankruptcy or a Chapter 13 bankruptcy filing is appropriate, and whether you are better off filing jointly, separately, or whether it’s best for just one of you to file.

In many cases, the most sensible approach for a married couple that is deeply in debt is to file their bankruptcy petition together. This permits all debt to be discharged at once, regardless of whether the debt is marital or individual while realizing significant savings on filing fees and attorneys’ fees. Doing so limits the amount of paperwork required, the number of meetings that the couple and their creditors need to attend, and the number of hearings with the court and the trustee. Perhaps the best reason for a couple to file a joint bankruptcy is to take advantage of double property exemptions which can protect more of their assets.

If your situation is such that only one of you should file for bankruptcy in order to protect separate nonexempt assets that would be lost in a Chapter 7 bankruptcy, or if debts are individually held in the name of each spouse, then filing a joint bankruptcy may not be the right approach. But people considering filing individually need to understand that doing so will require that both spouse’s income be included in the bankruptcy paperwork. Add to that the fact that two individual cases lead to two separate filing fees and attorney fees, and you can see where separate filings have drawbacks.

To determine what approach is best for you, contact our experienced bankruptcy attorneys today.

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