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Should a couple file bankruptcy jointly or separately?

On Behalf of | Aug 27, 2017 | Bankruptcy

If you and your spouse are considering bankruptcy, you are probably concerned about the consequences. You have the option of filing jointly or separately, and you do not want to make the wrong decision.

An attorney will tell you that there are advantages and disadvantages to each process. However, be assured that there is a right choice for your particular circumstances.

The logic behind filing jointly

If you file for bankruptcy jointly, both you and your spouse will present all your debts and property, including any that you have acquired during your marriage. Basically, you will fill out a set of forms containing the details. The court will take your combined assets into consideration when creating a plan for liquidation or repayment. The state of Texas allows married couples double the exemptions of single filers, and you may be able to keep assets valued under a certain amount. If you choose to file jointly, you will also save money, since there will only be one filing fee.

Reasons to file separately

Filing separately for bankruptcy may be a good choice if you and your spouse do not have much community property, or if one of you has acquired most of the debt. Since Texas is a community property state, the bankruptcy estate would claim all your marital property. However, it would not be able to touch the separate property belonging to the person who is not filing. If you happen to be going through a divorce, filing separately might also be advisable, as a joint filing could complicate that process.

A good legal solution

Because they do not understand the process, people sometimes think of bankruptcy in negative terms. The truth is, this is a viable, legal solution for financial trouble that anyone may encounter. Once you and your spouse decide whether you wish to file jointly or separately, you can begin the process to get out of debt.