In this article, you will learn:
- The best bankruptcy option for married couples
- How to file bankruptcy if married
- What happens if filing for bankruptcy with a spouse
A married couple may file a joint bankruptcy. Meaning both spouses may file at the same time in the same case, for the same filing fee, and it enables them both to get a discharge of those same debts at the same time, which can be a significant benefit to them.
Can And Should Married People File For Bankruptcy Instead Of Together?
The determination of whether a single spouse bankruptcy or a joint bankruptcy will really depend on the situation and the debts and assets of the couple. If everything is jointly owned, a joint bankruptcy will generally be beneficial. On the other hand, if one spouse has more significant assets than the other and, depending on where/how those debts are held, it may benefit one spouse to go through bankruptcy but not the other. This is going to be a very fact-specific inquiry each time.
Could My Spouse End Up Owing For My Personal Or Joint Debts If I File Bankruptcy Alone?
Your spouse will not end up owing your creditor for your personal and individual debts if you file for bankruptcy alone. However, that is not the case for joint debts. If you and your spouse have joint debts and only one of you files for bankruptcy, that may create a default under that debt and the creditor might pursue your spouse for the entire debt. So that’s where the joint bankruptcy ability for married couples comes in. A joint bankruptcy may be of benefit even if only one spouse has the majority of the debt, if there is some joint debt that could affect the married couple. It is important to make sure you speak to your attorney, sharing all the facts, all applicable situations, and all information about the debt so the attorney is aware of the situation, including who owns what debt, and who is liable for what debt so you can decide of which is going to benefit each person.
Is Filing A Chapter 7 Or A Chapter 13 Better For A Married Couple?
Filing a Chapter 7 is generally going to always be the preference because, just like any debtor, it is quick, fast, easy, and the least expensive of all the different varieties of bankruptcy. Still, not everyone will qualify for Chapter 7. If you do not qualify for Chapter 7, then typically for an individual consumer, Chapter 13 will be your next step. Chapter 13 is cheaper, more cost-effective, and time-effective than Chapter 11. Still, some debtors are not going to qualify for a Chapter 13 because of the amount of their debt or income. In that case, the individual is not going to have any option except for Chapter 11. If you qualify for Chapter 7, generally, you go with Chapter 7 unless you have a lot of assets that have a lot of equity. You may prefer Chapter 13 if you don’t qualify for Chapter 7 or if you have a lot of assets with equity which you want to maintain.
The only reasons an individual would likely use Chapter 11 is either (1) you do not qualify for Chapter 13 or (2) you have enough assets that you need a creative plan that you could not otherwise create under 13, but that you might be able to do under a Chapter 11.
Does My Spouse’s Income Affect My Bankruptcy If I Am Filing Alone?
Your spouse’s income will come into play in terms of the household expenses and the money that is available to pay those expenses. So, even if you are filing individually, the income that your spouse makes will be relevant and will come into play. The primary place your spouse’s income will come into play is for what is commonly known as the “the means test” under Chapter 7. Whether or not you may qualify for Chapter 7 may depend in some part on your spouse’s income.
Do I Need To File My Spouse’s Income On My Bankruptcy Petition Even Though I Am Filing Alone?
Your spouse’s income will come into play if you are filing a Chapter 7 because it will be relevant as to whether or not you may qualify to file a Chapter 7. Your spouse’s income would come into play with what is called “the means test.” The “means test” is a statutory test to determine whether specific debtors qualify for a Chapter 7. Whether filing individually or jointly, your spouse’s income will be something that your bankruptcy attorney will need to know in helping to plan out your bankruptcy process.
For more information on Married Couples Filing Jointly For Bankruptcy, an initial consultation is your next best step. Get the information and legal answers you seek by calling (205) 506-3354 today.