When you are married, you and your spouse likely share many different debt obligations. You may have joint credit cards, a shared mortgage and car loans in both of your names. When you borrow money as a married couple, you are both responsible for repaying the debts that you took on together. You are usually jointly and severally liable, which means that a creditor could collect money from either one of you or from both of you together.
Because the finances of married spouses are usually very intertwined, issues can arise when one spouse decide to declare bankruptcy. A decision must be made under these circumstance about whether the spouses should file jointly or whether only the spouse in the most debt trouble should pursue relief from the bankruptcy court. Because the answer differs on a case-by-case basis, it is advisable to consult with a Nassau bankruptcy lawyer when making the choice about whether to file bankruptcy together with your spouse.
Filing Joint Bankruptcy vs. Only One Spouse Filing
If just one spouse files for bankruptcy protections, then the debts the couple shares could become the responsibility of the other spouse. This would leave the marital unit in a similar state as before the bankruptcy, since the debts would still need to be paid.
Filing together also allows you and your spouse to take advantage of larger exemptions available since there are two of you. When you file for Chapter 7 bankruptcy protection, some of your assets will need to be sold unless the assets are exempt. A joint filing with larger exemptions thus allows you to keep more of your property during the bankruptcy filing.
Finally, another benefit to a joint filing is that you will only have to pay one bankruptcy fee. If you file alone and your spouse then decides to declare bankruptcy at a later time, you will have to pay the court costs and fees and go through the entire process a second time. This can be a difficult, expensive and time consuming thing to do and it is usually best to avoid it by filing together.
However, there are certain exceptions to when a joint bankruptcy in Nassau should be filed. For example, if your spouse has very good credit, you may wish to avoid having a joint filing since your spouse could keep that good credit if he does not go bankrupt. Then, when you need to borrow money after your bankruptcy, you could qualify for favorable terms by applying in your spouse’s name alone.
A variety of different considerations must be weighed in determining whether to file bankruptcy in Nassau on your own or jointly with your spouse. Contact the Law Offices of Ronald D. Weiss, P.C. to speak with a Nassau bankruptcy lawyer and get advice on what makes sense for your situation.