When you enter into marriage there are a lot of new things to consider. One thing many couples do not think about is bankruptcy. While jointly filing for bankruptcy can make a positive impact, it can also prove more difficult to protect certain types of property. Here’s what to know about filing for bankruptcy when you are recently married.
The Benefits of Filing Jointly
One of the biggest benefits of filing for bankruptcy jointly is that it can serve as a clean slate for all of the couple’s debts. Additionally, by filing jointly the couple can save themselves from having to pay attorney fees multiple times. If a couple files jointly, it won’t require an attorney to do the work for two separate petitions, which can again save money.
While there are certainly many benefits to filing for bankruptcy jointly, it’s not always in the best interest of both parties. There are other considerations that must be examined before a couple comes to a decision for how they would like to file. These considerations include the following:
1. Filing for Chapter 7 Bankruptcy may be more difficult if married.
In order to be eligible for Chapter 7 Bankruptcy, you must pass a means test. This means that your income must be no more than the median income for the state. If your income is above the median, then you will have to include your expenses in order to see if you qualify. When a married couple files jointly, the means test includes both parties’ incomes – even if just one spouse is filing. This can make it more likely that your income on the means test will be too high, regardless of whether or not the other spouse actually files the case.
2. It can be more difficult to protect your property if you are married.
Chapter 7 Bankruptcy exemptions allow the person filing to keep a certain amount of property. As with the previous consideration, a couple that files jointly may be able to double the amount of the exemption since there is double the amount of property. Depending on what property needs to be exempt, filing for bankruptcy separately may allow each spouse to protect more of his or her own separate property.
It’s important to remember that married couples are not required to file bankruptcy jointly. This is especially true if only one spouse is in need of filing. Regardless of how you file, if you are married both your income and your spouse’s must be reported. However, the spouse who is not involved in filing likely won’t have their separate property impacted. Whether or not any property is liquidated will be determined by the available exemptions for that particular case.
Toronjo & Prosser Law Helps Those Who Are Dealing with Bankruptcy
Not having enough month for bills can be difficult, and even more stressful when you realize that filing for bankruptcy may be your best option. It is important to consult with a knowledgeable and experienced Dallas bankruptcy attorney. At Toronjo & Prosser, our qualified Dallas Bankruptcy Attorneys can help you to navigate the process. To learn more or to schedule a free consultation contact us online or call us today!