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A married couple can file a joint petition for bankruptcy that wipes out dischargeable debt. A joint bankruptcy petition for a married couple is efficient because it includes the spouses’ total income and assets, as well as their complete expenses and debts. Marital property as well as independently owned separate property is included in the petition. The discharge of debt in a single bankruptcy filing will include all shared debts the couples owe together as well as their individual debts. At the Bankruptcy Center of Illinois, a seasoned DuPage County bankruptcy attorney can help you assess your options and determine the type of filing that best suits your needs as a couple.
A joint bankruptcy petition provides a way for couples to discharge their debt together. Often, debtors take out loans with their spouse. A mortgage contract, for example, may be signed by both spouses. In this example, because both spouses signed the loan, if the loan enters into default due to nonpayment, then both spouses will be affected. A joint bankruptcy petition would offer the advantage of wiping out the debt for both people. Alternatively, if a single spouse files for bankruptcy, the other spouse would remain liable for the debt.
The details of the entire financial situation determine whether a joint bankruptcy petition makes sense for a married couple. An experienced bankruptcy attorney can review the finances for both people and evaluate the best course of action. When a judgment is against only one spouse, joint assets may remain protected.
Types of debt that may be reviewed for married couples include car loans, a mortgage, and medical bills. Often, medical bills are held by one person. This is an example of an individual debt, where one spouse remains liable. Joint assets, such as a home, include a mortgage. Business loans may prove complex and may require both spouses to sign a business loan.
When spouses are in different financial positions, filing for joint bankruptcy may not be the best solution to financial difficulties. For example, if one spouse owns a large amount of property, the other spouse may want to file individually, excluding the separate property that belongs to the other spouse from their bankruptcy case. If one spouse owes child support arrears, the law requires that these be paid entirely before filing for Chapter 13 bankruptcy. Including these debts may make it more challenging to meet payments according to the plan. The spouse who owes these payments may be advised to file separately.
Exemptions provide a way to protect assets. Filing jointly for bankruptcy usually allows a couple to double their exemptions. Exemptions protect specific assets from creditors. In Chapter 7 bankruptcy, property may be protected. In Chapter 13 bankruptcy, exemptions play into the total amount you will be required to repay creditors. Spouses are entitled to double the exemption amount, provided they both own the property and file a joint bankruptcy case.
At the Bankruptcy Center of Illinois we appreciate that every couple faces a unique financial situation. If you and your spouse are considering filing a joint petition for bankruptcy or filing individually, a trustworthy DuPage county bankruptcy lawyer can provide advice and representation. Filing for bankruptcy together as a married couple reduces costs and time. However, there are circumstances that make it more appropriate to file individually.
Learn more by calling our office to setup a free consultation with an experienced DuPage County attorney. We represent clients residing in Arlington Heights, Evanston, Mount Prospect, Oak Park, as well as Lake County and surrounding areas. We can be reached by phone at (773) 993-0024 or through our online form and are here to represent you throughout the bankruptcy process.