When married couples contemplate filing bankruptcy, one of the first things that they often consider is whether they should file bankruptcy together. Or to take the question one step further back, a married couple might begin by wondering whether it is even possible to file a bankruptcy jointly rather than as two separate, individual cases. In most cases, the answer to this query is yes. In this brief examination of jointly filed bankruptcies we will explore why this is case, as well as the specific reasons why it may be beneficial for spouses to file together.
In most circumstances, spouses are usually able to file bankruptcy together through a joint filing, meaning that they will share a single bankruptcy, a single attorney, a single trustee and a single discharge. There are two major caveats to this: The first is that to file jointly, spouses must be married under the law when the bankruptcy is filed. The bankruptcy code does not currently allow long term partners or significant others to file together unless they are married in the eyes of the law at the time that the bankruptcy is filed. The second major caveat concerns situations in which one or both spouses may have previously filed separate bankruptcies. Given that a minimum period of time must pass after the last bankruptcy before another can be filed, there may be situations in which one spouse cannot yet file if a sufficient amount of time has not yet passed since their last bankruptcy filing.
However, in most situations spouses will be allowed to file bankruptcy jointly should they wish to do so. In this circumstance it will usually make sense to file together for a few reasons, the first of which concerns jointly held debts. For many married couples, it is very common for both spouses to be attached to some, or all, of the debts held by the other spouse, whether this be a jointly held credit card, a car loan or even a medical bill. In this situation, it is to the advantage of both spouses to file bankruptcy together, as doing so will allow each of them to receive the benefit of the bankruptcy discharge. If both spouses were attached to the debt and only one spouse filed, then only the spouse who filed would have their liability on the debt discharged.
Additionally, filing a joint bankruptcy will typically allow spouses to save money on the cost of bankruptcy as well! This is due to a variety of different reasons, but the biggest is that since you and your spouse are sharing a bankruptcy, you only have to pay your lawyer for a single filing rather than two separate ones! Moreover, if you are considering a Chapter 13 bankruptcy, the payments made into the plan will often be the same regardless of whether one or both spouses file, meaning that in a Chapter 13 you can often discharge the debts of a second spouse at no additional cost! In speaking with your attorney, they will advise you on the specific impact that adding a second spouse will have on your bankruptcy filing.
Spouses share in many elements of each other’s lives, and our finances are no exception to this. When spouses face financial burdens, they also share in the process of seeking relief together, and resolving them as a team. Bankruptcy is no exception to this rule, and our highly experiences staff are experts in crafting bankruptcy filings that allow both spouses to feel the full benefit of the bankruptcy process while still accounting for their specific and individual 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.
