Joint Debts with your Spouse? To file bankruptcy alone or together?

If you and your spouse hold joint debt that you are both liable for, you might want to consider a joint bankruptcy. If your spouse does not file, creditors can and most likely will pursue him or her for debts that they were also legally liable for.  If you file for Chapter 7, creditors can start pursuing your spouse right away as the law affords them no protection. If you file for Chapter 13, the creditor must wait until your bankruptcy plan is over and can then come after your spouse. In most cases, it just makes sense to file a joint bankruptcy with your spouse.  However, if your spouse is only joint on one or two smaller and manageable debts, then it might not make sense for him or her to also file. In deciding whether to file your bankruptcy joint or individually, a good starting point is to find out exactly what all of the debts are in your marriage and who is liable for what. Keep in mind that if you are considering a joint bankruptcy, you can only do one jointly with your spouse. You cannot file a joint case with a siginficant other, parent, child, roommate, etc., even if you have debt together. 

Bankruptcy laws are tricky and what you don't know could hurt you, or your family. Give us a call and we will be happy to help you figure out whether or not your spouse should also join you in the filing for bankruptcy. 

Carol O'Connor Cadiz
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Attorney & Owner at O'Connor Cadiz Law: Bankruptcy, Injury, Real Estate & Mediation