Should spouses file bankruptcy together?
When married couple contemplate bankruptcy, they often first consider whether they should file jointly. Or, to take it a step further, a couple might start by wondering if it is possible to file bankruptcy jointly, rather than two separate cases. In most cases, yes. This brief article will explain why this is the case and why it might be beneficial for spouses who file jointly.
In the majority of cases, spouses can file bankruptcy jointly. This means that they share a bankruptcy, an attorney, a trustee, and a discharge. This is subject to two caveats: First, to file jointly under the law, spouses must already be married at the time the bankruptcy is filed. The bankruptcy code currently does not allow long-term partners or significant other to file jointly unless they were married under the law when the bankruptcy was filed. The second caveat is that one or both spouses could have filed separate bankruptcy in the past. There may be situations where one spouse is unable to file because a certain amount of time must have passed since the last bankruptcy.
However in most cases, spouses are allowed to file jointly if they so wish. In this situation, it is usually a good idea to file jointly for several reasons. The first one is that the debts are held jointly. In many married couples, both spouses are often liable for the debts of the other spouse. This could be a joint credit card, car loan, or even a medical invoice. In this situation it is in the best interest of both spouses that they file bankruptcy together. This will allow them to each receive the benefit from the bankruptcy discharge. If both spouses are liable for the debt, but only one spouse files bankruptcy, only that spouse will be discharged.
Additionally, filing a joint bankruptcy will typically allow spouses to save money on the cost of bankruptcy as well! It is for many reasons, but one of the most important is that you and your spouse will only be paying your lawyer once, rather than twice! If you are considering Chapter 13 bankruptcy, you will find that the payments into the plan are often the same whether you or your spouse file. This means you can often discharge a second spouse’s debts at no extra cost if you choose to do so. Your attorney will be able to tell you the impact of adding a second partner on your bankruptcy.
Spouses are involved in each other’s finances and many other aspects of their lives. When spouses are faced with financial hardships, they work together to find solutions and seek relief. Our highly experienced staff is experts at crafting bankruptcy filings so that both spouses can benefit from the bankruptcy process, while still taking into account their individual and specific financial needs.
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When the time is right, or when you are ready, please don’t hesitate to reach out to Minnesota’s most kind and helpful bankruptcy law firm by going now to www.lifebacklaw.com.
