Chapter 13
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Joint or Individual Filing

An important decision for married couples is whether to file singly or jointly or file individual cases under different chapters of the Bankruptcy Code.

This is usually dependent on what debts are jointly owed, what property is jointly owned and the legal kind of ownership. We will advise you of all the options in your particular situation so you can make the best choice.

Liability Of Your Spouse

The determination of who is obligated on a debt depends on whether one or both spouses signed an agreement to be responsible, and whether state law obligates a spouse.

Most credit card companies take the position that anyone who was issued a credit card is jointly obligated; however, this is not completely true. One spouse is not responsible to pay the other’s credit card debt unless he or she signed an agreement to be responsible, or accepted such responsibility.

Additionally, one spouse may be liable for the necessities of the other spouse under state law. This determination has to be made on a case-by-case basis. A medical bill for one spouse, for example, is usually considered a necessity obligating both, but usually luxury debts are not.

Never assume that you are obligated to pay your spouse’s debts. Unless your own debts require you to file, you probably should not file a joint bankruptcy case unless you are sure that you are obligated to pay the other’s debts. Consider defending yourself and file bankruptcy if later found responsible. Remember that the creditor has the burden of proving that you are legally obligated before they can obtain a judgment against you.

Don’t take on your creditors alone!

Call or email the Counce Law Firm at 901-201-6012.
Free confidential consultation with a lawyer, not a paralegal.
We take the time to understand your needs and answer all of your questions. While we want to solve your problem quickly, it’s important that you are comfortable with the process, and understand how it will impact you. These thoughtful conversations enable us to ensure the best possible outcomes.

3333 Poplar Ave. – just West of Poplar & Highland – Free Parking

Strategies – Joint Vs. Individual Filings

There are many possibilities. For example, one spouse with the most debt could file a Chapter 7 case. This may free up enough income to keep the other out of bankruptcy and ultimately keep at least one with good credit. The other spouse could also file Chapter 13 to manage secured debts by lowering car payments and curing mortgage defaults. Many times this often results in a lower monthly outlay than a joint Chapter 13 case. A careful analysis is required to pick the best strategy.

Separate cases are sometimes called for where the amount and nature of debts of one could put a joint Chapter 13 in jeopardy, or if one spouse owns most of the property. It may be better to file separate cases and not put the fresh start of the other in jeopardy.

We will weigh the possibilities and advise you what we think is best, but you ultimately make the final decision.

Property Ownership Considerations

Which spouse owns what property and the type of ownership in joint property are vital factors in determining whether to file a joint case, separate cases or only one filing. One spouse with nonexempt property might not file, or could file Chapter 13 and pay what is required to save this property. The other spouse who does not risk losing any property might file Chapter 7 and avoid paying part of the unsecured debt.

The home is usually the largest and most important asset of most couples. Fortunately, most spouses purchase their home with a type of ownership known as Tenants by the Entirety. One important characteristic of this type of ownership is the right of survivorship, which typically preserves the property for a spouse regardless of the individual actions of the other. This characteristic is important in bankruptcy, because the bankruptcy trustee of one spouse cannot force the sale of such a home unless there are joint debts or both file. Although the bankruptcy trustee could sell the survivorship interest, it is usually abandoned by the trustee and you get to keep your home. This may allow one spouse to file a Chapter 7 case and keep the home even if it is paid for or has a large nonexempt equity. You need the help of a skilled professional to guide you through this process.

Contact Us Today

Call now to learn about what options are available to you in your particular financial situation. Contact our law firm today online or call 901-201-6012 to schedule a FREE CONFIDENTIAL CONSULTATION.

Unlike many firms, with us you will always discuss your financial situation with an attorney, not a paralegal or assistant.

We are a Title 11 Debt Relief Agency. We help people file for bankruptcy relief under the Bankruptcy Code. This ad does not create an attorney-client relationship until a written agreement is signed.