Filing for bankruptcy can be an arduous process, but it doesn’t necessarily have to be. One way to relieve the stress of bankruptcy is by assessing your financial situation and seeking out your options, especially if you’re married.
A joint bankruptcy petition—meaning a bankruptcy filed by a married couple—can be a beneficial choice for many couples. Here’s what you need to know about whether to file for bankruptcy as a joint petition or single petition.
Advantages of Joint Bankruptcy
- Clear debt owed by you and your partner. In one fell swoop you can wipe out the debt that you and your spouse both owe. If only one person files for bankruptcy, the other would still be on the hook for their debt.
- Save on fees. If you file for a joint bankruptcy, both of you would pay the same amount of fees as if you filed for a single petition.
- Less paperwork. With a joint petition, you’ll only need to gather documents for income, property and debt once.
Disadvantages of Joint Bankruptcy
Simply because you’re married doesn’t mean you have to file for a joint bankruptcy. Below are a few reasons why you wouldn’t file a joint petition:
- Impacts both of your credit. If you file a joint petition, both of you will have your credit negatively impacted. If one person doesn’t have much debt, it would be ideal to keep them out of the bankruptcy and save their credit score. That way they can qualify for a credit card, home loan or a car while the other person builds up their credit.
- Not all of your property may be exempt. Both your property and your partner’s are included in a joint bankruptcy. Depending on the state you live in, not all your property may be covered by exemptions, meaning you or your partner could lose your property because of the joint bankruptcy.
- Your payments could be higher. Even if only one of you has priority debts, such as child support, both of you will be liable for any higher payments.
- You or your partner may not be able to file for bankruptcy. If you or your spouse have filed for bankruptcy before, you may not be able to file for a joint bankruptcy until the allotted waiting period has expired.
Whether you’re filing for Chapter 7 or Chapter 13 bankruptcy, a joint petition has its clear advantages: cleared debt for you and your spouse, money saved and less paperwork. If your partner has manageable debt, decent credit and exempt property, your best bet would be to file for single bankruptcy.
If you’re still unsure about whether to file for bankruptcy as a joint petition or single petition, let our experienced Northbrook bankruptcy attorneys at Bach Law Offices guide you through the process. Contact us today!