The decision to file bankruptcy is a big one – and one that can have a long-lasting impact on the individual’s financial state, credit score, ability to obtain a mortgage, etc.  Therefore, if a person is married and considering filing bankruptcy, the person typically discusses this possibility with the spouse in order for the couple to come to a mutual agreement about how to move forward with this process.

If both spouses are considering filing for bankruptcy, the law allows them to file their application together on one petition, which is called filing a joint bankruptcy.  When a couple files jointly, the couple’s combined debts and assets become part of the bankruptcy.  For many people, filing a joint bankruptcy is the right decision.  Filing jointly saves on bankruptcy costs (because the couple only needs to pay one filing fee) and also is more efficient and time-saving (because the couple has to attend a meeting together and submit documents to the court).

However, if only one spouse is considering bankruptcy, that person does have the option to file a single bankruptcy petition, which may be more appropriate depending on the person’s individual circumstances and the couple’s joint circumstances.  The person’s spouse is not required to file too.

There are many factors to consider when deciding whether to file a joint bankruptcy or a single bankruptcy petition.  For example, a joint bankruptcy filing is reflected on the credit reports of both spouses.  However, if just the husband files bankruptcy, that bankruptcy will not be reflected on the wife’s credit report.

Additionally, even if the husband who is filing for bankruptcy does not have any assets, the wife’s assets will still be taken into account for many bankruptcy purposes, such as when the court determines the husband’s eligibility to qualify for a Chapter 7 bankruptcy.  (The wife’s assets will only be taken into consideration if the couple shares a marital home).  The wife’s assets would also be included in the court’s calculation of the husband’s income when the court evaluates the husband’s eligibility for filing a Chapter 13 bankruptcy (again, only if they share a household).

If you and your spouse are considering filing a joint bankruptcy or a single bankruptcy, contact our office today to discuss these processes and we explain the benefits and disadvantages of each.  Our office will help you determine which process is most appropriate and best fits your family’s needs.  We look forward to working with you!