Joint Marital Debt

CAN JUST ONE SPOUSE FILE BANKRUPTCY?

Both spouses do not always have to file for bankruptcy together. Every situation is unique.  I will evaluate your personal situation to determine whether it is more beneficial to file individually or jointly.  Here are some advantages and disadvantages:

The Advantages of One Spouse Filing for Bankruptcy:

  • Unsecured debts are discharged for the individual who is filing
  • Discretionary income increases for the couple
  • Asset protection can be increased in certain situations
  • Your credit score might improve more rapidly
  • The non-filing spouse’s expected financial award (e.g., inheritance, property settlement or personal injury settlement) will remain protected

The Disadvantages of One Spouse Filing for Bankruptcy:

  • The non-filing spouse will still be responsible for paying joint marital debt.
  • Dual filing fees are less costly than if each spouse were to file separate bankruptcies (e.g., the other spouse files for bankruptcy on a different date).

I AM CONTEMPLATING DIVORCE AND WE HAVE A LOT OF DEBT

It may be beneficial to eliminate debts in bankruptcy prior to the divorce rather than trying to apportion debts and running up a large divorce legal bill by arguing over who will pay which debts.