Individual Bankruptcy vs. Joint Bankruptcy

Are you thinking about filing for bankruptcy? Married? Need more information about filing alone or with your spouse? Well, you are in the right place!  

This blog will go over a few things to keep in mind when you are married and filing bankruptcy.  

1. Filing alone does not mean that you can ignore spousal income 

A lot of people will try to file alone so that they can file under Chapter 7 thinking that only their income matters. This is simply not true. The income (and expenses) that we must list in a bankruptcy covers any household members. If you are over the median for your household size, you may not qualify for a Chapter 7. However, Chapter 13 bankruptcy is still usually an option depending on your debt.  

2. If both you and your spouse share debt, including but not limited to being a co-debtor or even an authorized signer on a card or account, then it may be better to file together.  

If you file alone with joint debt, that person will still be responsible for the debt even if your obligation is discharged. If you are the only person listed on your debt and your spouse has little to no debt, then you could decide to file alone. 

3. Pull a credit report! Sometimes joint debt will show up in strange places.  

If you allow your spouse to get their own card on your account, then they will be responsible for the debt as well. Also, investigate medical debt. Some hospitals and doctors may require that you sign as a party responsible for charges that your spouse incurred.  

4. Joint filing may save money in the long run.  

If you and your spouse file for bankruptcy, that is one case and one cost. If you file alone and then your spouse decides to file a year or two down the road, then that is two cases, and you will be paying separate fees. This may be unavoidable if they have no debt when you file, but in many cases, a joint case could be more financially sound.  

5. If you or your spouse has filed bankruptcy recently, you may not be able to file a joint case.  

The minimum time between two Chapter 7 filings is 8 years, a Chapter 13 and a Chapter 7 is 6 years, a Chapter 7 and Chapter 13 is 4 years, the time in between two Chapter 13 filings is 2 years. This time is calculated from the filing date, not the discharge date.  

Have more questions about filing with or without your spouse? Our Myrtle Beach bankruptcy attorney, Huong Lam can steer you in the right direction. Call us today at (843) 695-7700 to set up your free initial consultation with our experienced legal team.