Having to worry about filing for bankruptcy is already a serious enough problem to face as a single person, but if you\’re already married then you will also then need to factor in the impact that the bankruptcy might have on your marriage, and vice versa. In many cases the financial collapse of a couple\’s life can lead to divorce, which brings its own set of complications in relation to filing for bankruptcy.
Joint Bankruptcy
As a married couple the first decision you\’ll need to make is whether or not you\’re going to file for bankruptcy jointly, or as separate individuals instead. If your marriage is stable, and your incurred debts are equally shared, then filing for bankruptcy together can help you protect your assets and most of your finances more readily. When you file joint bankruptcy you need to include all the property, debt, income and expenses you both share.
Your Property
There is an upper limit to the exemptions which are available to you as part of your filing. What this means is that if the total value of your combined property is higher than the exemption level you can run into problems with having your debts discharged. Some states will allow you to double your exemptions when filing for joint bankruptcy, and other states won\’t. The only way to be 100% certain about what level of exemption you\’re entitled to is to consult with a professional bankruptcy lawyer.
Joint Filing Benefits
The major benefit of filing for bankruptcy together means that you can discharge joint debt with one single set of paperwork instead of having to file for bankruptcy individually, doubling your workload and expense. You can save a small fortune in attorney\’s fees by filing a joint bankruptcy, so it makes perfect sense here too. A joint filing is also far more efficient in terms of preparing paperwork because even if you decide to handle filing for bankruptcy yourself – without an attorney\’s advice, – you still only have to prepare all the documentation once. You\’ll also only need to attend one set of bankruptcy hearings too, saving you a lot of time and heartache in the process.
Same-Sex Couples
Until quite recently a same-sex couple would not have been able to file for joint bankruptcy. However recent changes brought in by the U.S. Supreme Court, and the total repeal of DOMA, means that a same-sex couple now have the same legal protection offered to heterosexual couples by the bankruptcy laws of the United States. The only stipulation here is that the same-sex couple must be legally married to be guaranteed that they can file for bankruptcy together – a common law marriage in this case simply won\’t be viewed as being enough.
Married But Filing Individually
You do obviously have the choice of filing an individual bankruptcy petition if all of the debts are your own and not shared with your spouse. After all there would be little benefit in filing to discharge joint debts when no such debts exist. Your spouse can, however, attend your bankruptcy hearings with you, although they are not obliged to do that by the courts. It\’s also worth noting that a bankruptcy trustee may ask your spouse to disclose their income and any jointly owned assets you might possess. Failing to disclose these assets properly can lead to a bankruptcy filing being dismissed either with or without prejudice.
If you find yourself in a position where filing for bankruptcy has become an inevitable fact of your life then please do seek professional legal counsel before taking your first steps on this journey.