Is filing joint bankruptcy a feasible option for the married debtors?

Debt Elimination without Declaring BankruptcyFiling bankruptcy is considered as last resort to the debt relief programs. These financial strapped debtors who failed to pay back the owed amount with the help of debt relief programs have no other options than filing bankruptcy. Well, filing bankruptcy has immense impact on the credit score and the legal procedure is quite complicated. A single mistake while filing petition with the bankruptcy court can be a reason for dismissal of your petition. If fact, most of the married debtors filing bankruptcy are confused whether or not they should jointly file bankruptcy. If you’re too undergoing dilemma, then you can continue reading to know whether it’s a feasible option to file joint bankruptcy

There are various factors that determine whether or not you should file bankruptcy jointly. Before you file a joint petition in the bankruptcy court, you need to evaluate whether majority of the unsecured debt is in the name of one spouse. If only one spouse is responsible for the owed amount, then the one responsible should file bankruptcy. But if you hold joint accounts and only a single spouse is filing bankruptcy, the non filing spouse may still be liable for his/her share of debt. In fact, the non-filing spouse is required to disclose his/her income while the other spouse files bankruptcy.

If a married couple has the debt on one spouse’s name, then the responsible individual should file bankruptcy. But it’s only possible if the non-filer does not hold joint credit card accounts. Well, the non-filer can effectively maintain his/her credit score without filing bankruptcy. But both the spouses are required to disclose the income even if one spouse files for chapter 7 or 13 bankruptcy. However, you can be eligible to file bankruptcy only after undergoing the “Means Test.” This is an income test where the income of both the spouses is analyzed to consider whether the filer is eligible for filing under chapter 7. If the household income inclusive of the income of both husband and wife is below the median income of the state, then the debtor qualifies the means test.

Therefore, you need to analyze whether you hold joint accounts or single accounts before filing for bankruptcy. If you’re joint card holders, then filing bankruptcy jointly can be a feasible option for you and your spouse.

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