Married partners in financial distress often face the difficult decision of whether to file for bankruptcy jointly or separately. It is a significant decision that can affect both partners’ financial futures, and understanding the implications of either option is essential for couples navigating this challenging moment.
Whether to file for bankruptcy separately or jointly comes down to the unique circumstances of your situation. It may be best to file together in some cases. In others, you are better off filing separately. Here is what you need to know.
The benefits and considerations of filing together
Filing for bankruptcy together means submitting a single petition, which can streamline the process. Addressing your debts collectively as a couple can significantly reduce the paperwork and processes involved. For example, discharging debt you are jointly responsible for will be easier.
Additionally, you can protect more assets through bankruptcy exemptions when you file as a couple. In New Jersey, couples can double their exemptions, offering better protection for jointly owned property. Presenting a united front may also help during negotiations with creditors, potentially leading to settlements that might not be achievable when filing separately.
Below are some tips that can help you make an informed decision.
- Assess the nature of your debts. It may make more sense for only one partner to file for bankruptcy if they are responsible for most of the debt.
- Consider the credit impact. Both your credit score and your spouse’s will be affected when filing jointly, which can have long-term consequences.
- Look ahead. What are your financial goals? Do you intend to apply for a loan or mortgage soon after?
Reaching out for personalized legal guidance can help you better understand the implications of filing alone or jointly and make informed decisions to protect your financial interests.
