Joint Bankruptcy or Joint Chapter 7 Bankruptcy is the filing opted by married couples who face surplus debts and seek options to have them discharged as they have challenges of paying them. Let’s first understand how the filing of Joint Bankruptcy works –
- A single set of bankruptcy papers are filed on behalf of the married couple (though there are two individuals involved)
- All property information, debts, income to the family and expenses are submitted to the court
- Debts can be those that are jointly owned or can be the ones that an individual owes to other
- Details of the debts that are expected to be discharged have to be provided in the petition – debts that can be allowed to be discharged as per Chapter 7 are considered in the joint petition
- For discharging of debts, the assets are usually cannibalized – it is normally not possible to protect every asset. Hence it is important to understand the risks involved in jointly filing for bankruptcy especially when you own properties with your spouse
- If the joint petitioners are from the Texas region, they can review the Federal and State Bankruptcy exemptions in order to protect their properties against liquidation in cases of filing a bankruptcy. One motor vehicle per licensed family member, 100-200 acres of property in the country or 10 acres in a city are some of the state level exemptions in Texas. Reviewing these with the bank attorney prior to filing the joint petition is a wise move
Now that we know how the filing process works, let’s also assess the advantages to opting for a joint bankruptcy filing.
- As filing for bankruptcy is an expensive ordeal, do it jointly is definitely going to cost you less. It will save couples from paying double the filing fees and paying your attorney twice the amount
- Most of the dischargeable debts are appropriately taken care of and eliminated in the joint bankruptcy filing
- The efficiency of completing the bankruptcy case is better when filed jointly – you save time by handling all of the tasks at a single phase/ time
However, there are some disadvantages to this process –
- All of the assets that are individually owned or jointly owned are disclosed during the filing procedure. This can also end up in liquidating valuable or viable properties by the trustee handling your case – at times the partner who owns more properties end up losing more of it
- The couple ends up in owing too much of priority debt. As per the clauses of Chapter 7, there are certain kinds of debts that cannot be discharged – taxes, mortgages and child support are some of this kind. In cases of these, the repayment in full of these debts also needs to be done jointly as per Chapter 13. In such situations, the partner who owes the debt can file the bankruptcy individually
Are you perplexed of whether to opt for a joint fling or not? A renowned law firm and the experienced attorneys will help determine your case and advise the course of action as needed. Seeking the assistance of such firms like the Recovery Law Group can put you in better positions of handling your bankruptcy scenario and also retain some of your prized assets by saving them from liquidation.