Married couples who are struggling financially often ask us whether they should both file for bankruptcy or if only one of them should file. There are numerous factors that must be considered in answering this question. A few important items to think about are:
- Debt. You must determine how the majority of your debt is held. For example, if your husband has the majority of the debt held in his name, it could be advantageous for only him to file a case. It is important to understand, however, that the filing spouse can only discharge the debt held solely in his name and his share of the debt held jointly. The non-filing spouse remains liable to pay the jointly-held debt, as well as his/her own personal debt.
- Assets. You must also consider how your assets are titled or owned. In other words, are the assets held in one spouse’s name or jointly?
- Property transfers. If you have transferred any property or assets out of your name (especially within the 2 years preceding your filing), the trustee will investigate the sale, gift or other type of transfer to determine whether it constitutes a fraudulent transfer. In other words, you cannot transfer property out of the filing spouse’s name to the non-filing spouse’s name in order to prevent the asset from being included in the bankruptcy filing.
There are many other considerations in deciding whether spouses should file jointly or separately, so it is vital to confer with us to make the best decision for your family.
Please keep in mind that every case is different. If you have questions about filing a joint or separate bankruptcy, and would like to schedule a no-cost consultation, please contact our office by completing the form on this website or calling us at (954) 516-2566.