How To File For Bankruptcy With Your Spouse or Significant Other

couple talking to financial advisor about bankruptcy


By:Mike Cibik


How To File For Bankruptcy With Your Spouse or Significant Other

Trying to keep up appearances and live life as you deem fit can often be a difficult task. However, matters get more complicated when you have creditors at your door demanding to be paid. While you may try to raise the required amount from as many sources as possible, it might not be possible to wipe out the entire debt at one go.


Wait! Here’s an effective solution available to you. It might actually be helpful to check the rules and understand if bankruptcy is right for you. Fret not; your spouse may also be able to help you out here. Remember that marriage is a partnership and you could try to ease your troubles by turning to your life partner in times of need.


It is advisable to contact a top Philadelphia bankruptcy attorney to find out what would be the best way forward for your case. Remember that you may be well placed to file for a joint bankruptcy in conjunction with your married partner. However, it is subject to specific regulations that may prove to be advantageous for you. Additionally, there may come a time when you would be better off by going it alone. Ask experienced bankruptcy lawyers to find out whether a ‘joint bankruptcy petition’ would work in your favor.


Although all your debts can be written off when you file jointly with your spouse, there are certain pitfalls to avoid while you try to save the property that you own jointly.


Things to consider before deciding to file for joint bankruptcy:


1. Debts – You will be liable for all joint debts as well as all the individual debts once you decide to file jointly.  Unfortunately, you will be equally liable for all the debts incurred by your married partner along with your own debt. So, do not fall for this particular trick if you do not have a lot of debts that have been taken jointly.

Experts recommend filing for bankruptcy individually that will discharge your debts at the moment making you heave a sigh of relief. Your spouse can decide to file Chapter 7 bankruptcy at an opportune moment later on thereby getting all the individual debts cleared as well.


2. Property– This is something that should be pondered before filing Chapter 13 bankruptcy. Remember that it will include all your properties whether they are owned jointly or just by one person, with the assets in either of your names. Your lawyer will certainly be able to advise you about the exemptions that you can enjoy on filing bankruptcy. 

The rules vary from State to State and, an experienced lawyer would be able to tell you what laws apply in your case. Opt for joint bankruptcy filing when the state you live in offers double exemption. Do steer clear of it, however, when your spouse owns a significant amount of assets that are not exempt from liability.


3. Tenancy – If you live in a house as a tenant with the tenancy being considered in entirety then you can certainly go ahead and file for joint bankruptcy. The state rules usually allow the individual who declares himself/herself to be bankrupt to continue residing in the said home. If the tenancy is held jointly as an entirety and not by only a single person.  Unfortunately, you have a risk of losing your home once you file for joint bankruptcy and the exemption is not enough to cover the equity.


4. Expenses – You definitely get to cut costs when you decide to declare bankruptcy as a couple. The filing fees are not increased for a joint petition when there are two individuals filing a single bankruptcy together. The legal fees payable to the bankruptcy attorney is also much lower in comparison to the sum of fees payable to two separate legal professionals.


5. Credit Score– A joint bankruptcy will be reflected in the credit reports of both the parties. The credit score is expended to show a slight increase soon after the bankruptcy is discharged. So, do go ahead and file jointly by all means if both of you want to start afresh.

You could only end up jeopardizing your own credit score if you decide to file jointly for helping your married partner who is financially down. Though it’s your duty to stick together and help out your spouse in troubled times, filing for bankruptcy can be complicated to navigate. And if you don’t do due diligence it could affect both of your financial future.


Cibik & Cataldo can help you with your joint spouse bankruptcy claim! If you would like to discuss your case, give us a call at 215-735-1060 for a free consultation.


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