As you likely realize, when either party (or both) in a marriage struggles with overwhelming debt, it affects the whole family. Money is usually scarce, and everyone ends up sacrificing some things.
Many couples considering bankruptcy wonder if they must file individually, regardless of who is responsible for most of the debt. Although each spouse has the right to file separately, sometimes it makes more sense to file jointly.
Benefits of a joint bankruptcy
Of course, filing a single bankruptcy instead of two separate ones offers a way to save money on associated fees, but that is not the only potential advantage.
Here are more to consider:
- It reduces the time and energy spent on bankruptcy proceedings
- It doubles your exemptions under North Carolina law
- You can discharge most debts (joint or separate) in a single filing
Many married couples also appreciate the stress reduction that comes with filing one petition instead of two.
Are there reasons to file individually?
Joint bankruptcy may not be the best option in every situation. For example, if you were the one who accrued the debt, a joint filing could harm your spouse’s credit score unnecessarily. An individual filing in such situations may allow the family to continue benefiting from your spouse’s untarnished credit.
In another example, some couples who file jointly fail to pass the means test required in a Chapter 7 (the most common type of consumer bankruptcy) filing. However, an individual Chapter 7 filing or opting for a Chapter 13 bankruptcy instead can still offer your family relief.
How do you know which to choose?
Get a realistic picture of your financial situation, including the extent of your assets and debts, to decide how to proceed with your bankruptcy. Legal guidance can help you determine the best option for your situation.
