I’m Married and I’m Broke. Should I File for Bankruptcy?

Joint or Separate BankruptcySummary: If you are married and considering bankruptcy, this guide will help you decide between a joint or separate filing.

Making the decision to file for bankruptcy can be both difficult and confusing. Each situation is unique; there is no standard solution for handling delicate financial matters like bankruptcy.

For married couples, the decision to file jointly or for one spouse to file separately depends on many factors. Here are some points to consider as you choose the best solution for yourself and your partner:


When Joint Filing is Your Best Option

Under certain circumstances, a married couple should file jointly. With a joint filing, the property of both spouses is included in the bankruptcy estate, and all debts of both spouses are part of the filing. Filing jointly also allows you to complete one set of forms, incur only one filing fee, and pay one lawyer, if applicable.

In the following situations, you may consider filing jointly:

  • Both you and your spouse are experiencing debt trouble.
  • Both you and your spouse reside in a community property state (Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin), and incurred most debts and acquired most property during your marriage. In these states, everything earned and all property bought during the marriage is community property, and all debts acquired during marriage are community debts. In this instance, joint filing allows both parties to release their separate debts and participate in decisions that will affect jointly held property.
  • The exemption laws of your state allow partners to double their exemptions. If this allows you to keep property you might otherwise lose, filing jointly may be a good option.

When You Should File Separately

In a separate filing, your share of the marital property and all separate property are part of the bankruptcy estate. If you or your spouse has substantial separate property to protect, you might consider filing separately.

You may consider a separate filing if:

  • One partner carries all or most of the debt, you don’t own any substantial property together and you married recently. In this instance, a separate filing will allow the partner who isn’t having debt trouble keep a good credit rating and maintain their separate property.
  • You and your spouse own property together as tenants by the entirety and, if one spouse files separately, your state excludes this property from the bankruptcy estate. In this case, filing separately may allow you to keep your home.

A separate filing may be unavoidable in certain situations. If one partner was discharged in a Chapter 7 case within the past eight years or a Chapter 13 case within six years, that spouse will not be able to file another Chapter 7 case. Additionally, if one spouse does not want to cooperate with a joint filing, you may also have to file separately.

In the complicated world of bankruptcy, there is no “one-size-fits-all” solution. It is always best to consult a qualified bankruptcy attorney who can examine your unique situation and explain your options. At Burr Law Office LLC, expert Milwaukee bankruptcy attorneys, we can help you make the best decision. If you are married and considering bankruptcy, call us today!

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