Should You File With Your Spouse?

When to File a Joint or Individual Bankruptcy

Married people file bankruptcy all the time, and many of them start off with the misconception that they must file a joint case. However, you do not have to file a joint bankruptcy just because you are married, and in some situations, you might be better off filing individually. A Morris County bankruptcy lawyer can review your debts and assets to help you determine which type of filing is right for you.

The Bankruptcy Discharge

A bankruptcy discharge does not wipe out your debt. Rather, it wipes out your legal obligation to repay the debt. The debt still exists, but your liability is gone. If you owe a debt jointly with another person, such as a co-signer, and you file bankruptcy, your discharge only affects you. The co-signer is still responsible for the debt.

Benefits of a Joint Case

A joint Chapter 7 or Chapter 13 bankruptcy will benefit you and your spouse if:

  • You have a lot of joint debt. If only one of you files the bankruptcy, the bankruptcy filer will be off the hook for the discharged debt, but the spouse who did not file will still be liable for the debt.
  • You both have a lot of debt and you cannot manage it. A joint bankruptcy case has only one filing fee, and most bankruptcy attorneys will not charge extra for a joint case. You essentially get two bankruptcy discharges for the price of one, and if both spouses need bankruptcy, a joint case makes sense.

Benefits of an Individual Case

If one spouse has excellent credit and manageable debt but the other needs a bankruptcy case, it may be beneficial for the spouse with good credit to stay out of the bankruptcy. Bankruptcy stays on your credit report for 10 years, and while your credit will get better long before the 10 years is over, it will be poor right after you file.

The best way to find out whether a joint or individual bankruptcy case in Morris County is right for you and your spouse is to contact a Morris County bankruptcy attorney and schedule a consultation.



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