If you’re married and are considering filing for bankruptcy, you would have to decide if you want to file jointly (you and your spouse file together) or separately (only one of you would file for bankruptcy). This decision is crucial since it might impact the specific property you could keep and the amount of debt that could be discharged. In general, the better option would be largely dependent on your specific circumstances and your state’s bankruptcy laws.
Would Filing for Bankruptcy Separately Make Sense?
When you file separately for bankruptcy, all of your marital property shares and separate property would automatically be a part of your bankruptcy estate. However, in community property states, the bankruptcy estate would claim all community property, even if one spouse files separately. But the bankruptcy estate won’t be able to claim the separate property of the non-filing spouse.
Filing separately for bankruptcy might make sense if one of the spouses has a substantial separate property that requires protecting, says bankruptcy attorneys in Provo.
Would Filing for Bankruptcy Jointly be Better?
When filing for bankruptcy jointly, the bankruptcy estate would claim of all of your property, you and your spouse’s, and all your debts would likewise be included when filing. If both you and your spouse have debt issues (whether separately or combined) and would want to file for bankruptcy, joint filing enables you to input all relevant details on a set of forms, spend money for only one filing fee, as well as use only one attorney.
If you’re still unsure of which option might be best for your case, it’s a great idea to discuss options available to you with an experienced bankruptcy attorney. As you could clearly see from the points discussed above, your decision would lead to consequences, which include the property you might get to keep and how much debt you could have discharged.
With these in mind, even if you think you could manage without an attorney with the rest of your case, you should still consider consulting one to make certain that you’re making the best decision for your particular circumstances.