Married couples. File Bankruptcy jointly or not?

Friday 5th of October 2012 01:22:29 AM

 

In California, a community property state, spouses in a marriage are both liable for any debt taken out by either spouse during their marriage.

This means that you are ultimately both on the hook for many of your debts.  The only bulletproof solution if you are facing dire financial straits would be to file jointly, as is your right.  Filing jointly offers several advantages.

First, filing jointly is usually less expensive;  You pay your filing fee once and your attorney once. Second, you have very likely formally co-signed debts together (this is especially true for mortgages).  In such situations, you are both liable for the mortgage, whether you were married or not.  If you don’t both file for bankruptcy, your mortgage lender will most certainly look to the signor that did not file for bankruptcy.

However, in the name of prudence, some married couples may elect to take their chances and only file bankruptcy for one spouse.  A creditor may make a business decision not to pursue a non signor spouse, even if they have legal grounds to do so.  This is sometimes the case when only one spouse is the formal debtor without the other spouse as a co-signor to the debt.  Keep in mind that the other spouse may always file individually at a later time should it become necessary, as is their right.

In the meantime, the marriage can rely on the non filing spouse’s credit profile as the one without a bankruptcy on it.

 

There are many non married co-debtors who wish they could file jointly.  Married couples have that option; use it to your best advantage.

If you are a married couple considering bankruptcy, a no fee no obligation consultation is the best thing to do.

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