Filing a bankruptcy petition along with your spouse could save you both time and money. This kind of filing is known as joint bankruptcy filing. Read on to know more about it:
When you file together, you submit a single set of bankruptcy papers with the court. In this petition, you and your spouse disclose all the property, debt, income and expenses you are having.
How are debts treated in a joint bankruptcy?
If you are filing together, you have to list all debts you are having jointly or individually. It may seem implausible, but with a single bankruptcy petition, you both can wipe out all your tangible or intangible debts. However, before you file, you need to make sure a joint bankruptcy serves your best interest.
Does a joint bankruptcy filing affect your property?
Just like your debts, you must disclose all property either own jointly or individually since all your property is an inseparable part of the joint bankruptcy filing. However, if the value of your combined assets goes beyond the bankruptcy exemptions available to you, your interests can be potentially harmed.
How to magnify the exemptions in a joint bankruptcy filing?
Certain states allow you to use the federal bankruptcy exemptions. If you are living in one of these states and file a joint petition, you may just double the amount of exemption. Moreover, while some states allow double exemptions in joint bankruptcy filing, some states do not. Further, you must own a property jointly with your spouse if you want to apply for double exemption.
What are the benefits of filing jointly?
Some of the benefits of filing a petition together have been mentioned below:
Lower bankruptcy costs: Whether you file together or separately, the filing fees are same. Furthermore, if you file together, you are likely to save on attorney fees.
Wipe out all debts: If you file for bankruptcy and your spouse remain passive, he/she will be still liable of all his/her individual and share of any joint debts once you receive the discharge. However, if you file together, no such issues will be there.
Convenient: If you file for bankruptcy, you need to provide extensive financial documentation and attend the creditors meeting at least once. Nevertheless, if you file jointly, both of you will be submitting your documents and attend the meeting together and for once.
