It is a difficult decision for most people to face whether or not to file bankruptcy. Further complicating this for some is the decision of whether or not to file jointly. This is an option that is available only to married couples. A marriage can affect a bankruptcy filing in many ways, including the ability to file jointly, something exclusive to married persons and their spouses.
How do you determine if you should file jointly or individually? The first consideration should be what type of bankruptcy you are looking at. When you are married, your spouse’s income is included in your budget, as are their expenses. For some, this inclusion could be the difference between a Chapter 7 or Chapter 13 bankruptcy. In many cases, the inclusion of a spouse into the budget calculations can make it make sense to file jointly in a Chapter 13, if both spouses can take the hit on their credit or will see a net positive at the end of the plan period.
The next thing to consider would be the types of debt that you and your spouse have. If you have debts that are owned jointly with a spouse, it is generally in the best interest of both spouses to file together. Joint debts are owned equally by both, meaning that both spouses are responsible for 100% of the balance. To file individually would remove the liability of the filing spouse and leave the non-filing spouse as the only one left responsible for that 100% balance. This includes tax debts that were filed jointly, authorized users on credit cards (whether or not the card was actually used by said user), and medical debts in many states, including Minnesota and Missouri. These considerations can also make joint filing the better choice for married couples.
Finally, with some firms, like Hoglund, Chwialkowski, and Mrozik, PLLC, there is little to no cost difference between filing individually and filing jointly. However, if it is a close set of circumstances and both parties file individually at separate times, there will be separate filing fees, as well as significantly more attorneys’ fees, sometimes double the cost or more. It can be a much more straightforward, and easier process in certain circumstances to just file jointly and wrap everything up in one proceeding. It is always best to be prepared for all options, and for both spouses to speak with an attorney about how filing jointly or separately may affect their unique situation.
Barry N. Moore, Jr.