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Choosing Between Joint and Individual Bankruptcy

Bankruptcy law is complicated. Whether or not spouses should file bankruptcy together or separately is a conundrum that must be considered on a case-by-case basis. Visit a bankruptcy attorney and expect to disclose your income, assets, debts, and similar financial information. Your bankruptcy lawyer will review all of the information before making recommendations for your particular situation.

Adding Up Your Income

If you're considering filing for Chapter 7 bankruptcy, then you must pass the means test. This involves adding up your income to determine if it exceeds a certain threshold established by your state. If it does exceed this threshold, then you are ineligible to file for Chapter 7 and you might consider filing Chapter 13 instead. If you're intent upon filing Chapter 7, then you might prefer to file individually if your spouse's income combined with yours will exceed this threshold.

Disclosing Previous Bankruptcies

Another reason why you may need to file individually instead of jointly is if your spouse has previously filed for bankruptcy. After filing, it's necessary to wait a set period of time before a person can file again. If there is still a few years before your spouse could file for bankruptcy again, then you will need to file individually.

Valuing Your Assets

Expect your bankruptcy attorney to ask you about the assets you own, those owned by your spouse, and your jointly owned assets. Your attorney will then evaluate the asset exemptions you are allowed to determine if it might be more beneficial to file jointly or individually.

Identifying Dischargeable Debts

Lastly, your lawyer will review a list of your debts to recommend whether an individual or joint filing is best for you. If your spouse has significant priority debts, which are debts that must be paid off during a Chapter 13 repayment plan, then the terms of the repayment plan might be difficult to manage. In this case, an individual filing might be best.

Cutler & Associates, Ltd. provides personalized, empathetic legal services for individuals and married couples who need a fresh financial start in life. We'll scrutinize your financial information and let you know whether filing jointly or individually would be most advantageous for you. Call (847) 961-4572 if you would like to schedule a visit with one of our friendly bankruptcy lawyers in the Chicago area.

Categories: Bankruptcy


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