There are numerous reasons why married couples filing bankruptcy need to consider their options. A Charlotte bankruptcy lawyer can assist you with clarifying your objectives, and then analyzing the choices for filing. Here is a very brief overview:
Avoid Bankruptcy Altogether
I speak with individuals every day who are facing issues with one creditor, or who do not have enough debt to make it worthwhile to file bankruptcy. In those instances, I provide guidance around negotiating with the existing creditors. I can assist in this process if necessary but I’ve found most individuals can do it on their own and save the attorney fee to put toward the debt.
Joint Filing
If most debt is held jointly, it will make sense to have both spouses file. While there is a concern to save the credit of one spouse, by the time most married couples filing bankruptcy speak with a bankruptcy attorney, their credit has already been hampered by late payments or a failure to pay.
Debt in the names of both spouses essentially means each spouse is 100% responsible for that debt. If one spouse files bankruptcy, that spouse is relieved of their obligation but the non-filing spouse is still on the hook for 100% of the debt. This is the primary reason to file jointly when there is substantial credit card, medical, or home debt.
Both Spouses Filing Separately
While these situations are rare, there are instances where both spouses will file bankruptcy, but the bankruptcy attorney will file the petitions separately. Typically, this is a strategy to meet the rules of bankruptcy and present the petitions to the court in a way which allows the spouses to qualify individually where they would not qualify if they filed together—usually an income barrier is overcome this way.
One Filing Spouse, One Non-Filing Spouse
If debt is primarily held in one spouse’s name, there may be good reason to file in that spouse’s name only. This also preserves the credit of the non-filing spouse. If the debt is not theirs, chances are their credit has been preserved along the road to their spouse’s bankruptcy. If there is a goal to purchase a home in the near future, the non-filing spouse’s credit can potentially be used to procure a loan for the home purchase.
Every Case Is Unique
Each client, each situation, is unique. Depending upon which spouse holds the debt or whose name the home is in, your bankruptcy attorney will be able to quickly assist you in sorting through the options and making a decision.
If you’d like to speak with an attorney, call 704.749.7747 today. I’m here to help.