I’m Married- Should I File Individually or Jointly?
Posted: January 20, 2016 by Jeffrey J. Randa
Being a bankruptcy law firm for over 20 years, we get a lot of married clients asking if they can file bankruptcy individually, without involving their spouse. It is natural to want to keep your spouse out of your financial situation, and sometimes, it is indeed very possible.
Lets look at the two options more closely (jointly or individually) …
- If both spouses file for bankruptcy, they will file what is called a joint petition. Here at the Law Office of Jeffrey Randa, there is no additional charge for a joint petition. Whether you decide to file together or alone, the price is the exact same.
- If just one spouse decides to file alone, then they will be filing an individual petition. Unless the married couple has joint debt, and are trying to get out of that joint debt, the individual petition will not affect their spouse.
Were going to explain some common situations so that you have a better idea of what will happen if you are married and you file individually, or you file jointly. However, keep in mind that these don’t exactly match everyone’s situations. When you are determining what is best for you and your family, always consult with an experienced bankruptcy attorney first. Jeff has been practicing the Chapter 7 bankruptcy process for over 25 years, and he knows all there is to it. You want to be sure that you are protecting your spouse from any financial harm.
- Bill and Tiffany are married, and Bill files for an individual bankruptcy. He owes money on a credit card that Tiffany is a cosigner for. It is a joint credit card, unlike one where a person designates another as an authorized user. When Bill claims the credit card in the bankruptcy, that will leave Tiffany as the sole liable party, which means she will be responsible for continuing to make the payments on the card with no help from Bill. This will not hurt her credit at all, but may make it harder for her to keep up with the payments on her own.
- If Bill and Tiffany file for a joint bankruptcy, the jointly-held credit card will be discharged altogether, leaving both of them with no liability for it.
- If Bill files for an individual bankruptcy, but does not list or claim their jointly-held credit card (or any other joint debt they may have), then there will be absolutely no consequence to Tiffany.
- If Bill lists any of his and Tiffany’s joint debt in his individual bankruptcy (i.e mortgage), but he agrees to keep paying for it, then there will most likely be no impact upon Tiffany. Promising to still pay on a debt is called reaffirming the debt.
- If a married couple files bankruptcy together, they both get the benefit of being released from any further obligation on any debts that they list in the bankruptcy (unless they reaffirm the debt). It does not matter whether those debts are individual or joint, as long as you claim them in the bankruptcy.
The situations that were mentioned above are among the most common that we encounter at our office. It is important to remember that every person’s situation is unique, and it is always best for you to discuss your situation with a qualified Sterling Heights bankruptcy attorney before you do anything!
Contact the Law Office of Jeffrey J. Randa today, and let us help you get that fresh start that you’ve been waiting for.