As a married couple filing for bankruptcy, you have the option of making individual submissions or a joint one. It isn't always easy to decide which route to take since there are benefits and challenges to both forms of fillings. Here are three cases where the benefits of joint fillings may outweigh its challenges:
You Have Lots of Joint Debts
If you have lots of joint debts, then you can wipe them all out by filling for a joint bankruptcy. If only one of you files for bankruptcy, then the other person still has to shoulder his or her debts, as well as any remaining joint debts.
This, however, only makes sense if you don't live in a community state. In a community state, there is nothing like joint or separate debt. Therefore, even if you make an individual filling, your non-filling spouse also gets to enjoy the protection afforded by the bankruptcy discharge. However, don't forget that you will both lose assets (in a community state) even if one of you makes the filing.
You Can Double Your Exemptions
There are states that allow married couples to double their exemptions. This is possible because your spouse gets to keep his or her exemptions, and you also do the same. In the end, this allows you to keep more assets. Of course, this will only be helpful if both of you were planning to file for bankruptcy.
You Don't Hold Property as Tenancy by the Entirety
If you have a real estate property whose title is in both of your names, then it is termed as property held as tenancy in the entirety. In some states, you may be able to keep such property if only one of you files for bankruptcy. As you can suspect, that can be a very motivating factor to make individual filings. For example, you wouldn't want to lose the property if it is your marital home. However, in the absence of property held as tenancy by the entirety, you can safely file for a single bankruptcy.
Don't forget that these are generalizations; there may be state laws or terms and conditions that you have to follow to enjoy the benefits of joint bankruptcy filing. Therefore, you ought to double check your facts first before submitting any bankruptcy forms; whether jointly or individually. An experienced bankruptcy lawyer will evaluate your assets and debts vis-à-vis your state laws and advise you accordingly.
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