Dealing with financial debt is one of the most difficult challenges married couples can face. Issues like joint bank accounts, credit scores, and differing approaches to finances can create friction in otherwise healthy relationships. Money problems can also bring an onslaught of questions: What are our debt relief options? Can one spouse file bankruptcy without the other? How will this affect our individual credit scores and our financial future together?
The good news is, bankruptcy doesn’t carry the same stigma it once did. For many, it can provide an appealing solution to an otherwise grim situation.
If you are facing mounting debts, a Jackson CA bankruptcy attorney can explain your options, both as individuals and as a couple. Contact the Law Office of Diane Anderson to learn more.
What Are Our Bankruptcy Options as a Couple?
When it comes to exploring bankruptcy options, a key question many married couples have is whether to file as a couple or as individuals.
As a couple, you can choose to file a joint bankruptcy petition. In this case, a single bankruptcy case is filed for both partners. What are the advantages of doing this? For one, it allows you to avoid the additional filing fee that would be paid for filing two separate cases. And for another, both spouses benefit from the “automatic stay”, which protects you against collection actions.
You also have the option of filing separate bankruptcy petitions. If you file separately, only the one spouse will have their debt discharged, and only one spouse will be able to receive the automatic stay. This means the spouse that is not filing for bankruptcy will not be protected and will remain liable for any joint debt.
It’s important to keep these factors in mind when deciding whether filing jointly or separately is best for your situation.
How Will Our Credit Scores Be Affected?
Filing jointly as a couple is a good option if both you and your spouse have debt in both of your names. If you file alone, your joint debt will become your spouse’s sole responsibility. If you file bankruptcy jointly, however, this will adversely affect both of your credit scores. This is an important factor to keep in mind if you have plans to buy a home, buy a car, or apply for future business loans.
Filing as an individual may make sense if you plan on doing any of the things mentioned above. For instance, let’s say your spouse is more in debt than you are. It could be better to have them file bankruptcy separately, so that you can retain a decent credit score. You may even be able to help your spouse rebuild their credit score later by co-signing future credit cards or loans.
When Can One Spouse File for Bankruptcy? Ask a Bankruptcy Attorney
If you’re considering filing for bankruptcy or have any questions regarding the legal process as a married couple, speak to a Jackson CA bankruptcy attorney today. Contact the Law Office of Diane Anderson to discuss your options.