By: Darrell Castle
Whether or not your spouse should file bankruptcy with you depends on what debt you’re trying to get rid of.
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If you have to file for bankruptcy, should you do it individually by yourself, or should you do it with your spouse, jointly? Which is better for you?
Hi, I’m Darrell Castle. I’m an attorney licensed to practice law in the state of Tennessee and the answer to that question as most answers to lawyer questions is – it depends. It depends on which debt you want to get rid of.
The real answer to it is that you should do it in a way that allows you to keep the most property and discharge the most debt. That is usually the best way to do it.
Now, if you do a bankruptcy jointly – or with your spouse – then there are some advantages to that. And maybe some disadvantages.
Some of the advantages to that is you get rid of all your debt that each of you has individually and you own jointly together – or you OWE jointly together I should say. Or if you have property that you own jointly, then all of that property has to be considered. It indicates a change of direction for you as a couple. You’re going to do your life differently. You’re going to approach it different. That’s what a joint petition says.
Now, let’s look at if you file individually.
Number one, if you filed individually – filed in your own name and left your husband or wife out of it – what that would mean is that all of your dischargeable debts that you individually owe would be discharged. All of the debts that you owe jointly with your spouse would be discharged.
But your spouse would be left hanging on that debt. Any debt that your spouse owed individually and any debt that you and your spouse owed jointly, your spouse would still have.
Now, another advantage to filing individually is that it might help in some credit situations possibly.
Let’s say that you had perfect credit and you were concerned about that and you owed very little debt yourself. But your spouse does not have perfect credit. Your spouse’s credit was bad. Your spouse owed a lot of unsecured debt – credit card bills, medical bills and things of that nature. Well then it might be to your advantage for only your spouse to file. You would still be able to file later if things got worse for you.
So those are some things to consider, but one other thing is that in this state of Tennessee – my state – exemptions are doubled when you file jointly, generally speaking.
That means that the amount of property you can keep is twice as much if you file jointly. So that is a factor to consider depending on where you are and your attorney can explain that to you. But in general, you can keep twice as much property if you file jointly, so that is a factor to consider.
All of these things should be discussed with your attorney to see where it stands with you and what’s best for you, folks.