Far from being a death sentence for financial stability, filing for bankruptcy can be a smart way to give yourself a fresh fiscal start. If you are married, you will want to carefully consider whether it makes more sense to file with your spouse or independently. As any bankruptcy attorney will tell you, in most cases, it’s better to file together. 

What to Consider: Shared Debts & Assets

If you and your spouse share debt, but only your spouse files for bankruptcy, creditors can still come after you. This can put you right back where you started—warding off stressful calls from lenders and dealing with bills you can’t pay.

You also have to think about shared assets. With chapter 7 bankruptcy, your possessions may be liquidated to pay off creditors. With chapter 13 bankruptcy, you are more likely to retain your assets. So if one spouse owns a valuable item like a house, it may make sense for the other to file independently to exclude that house from bankruptcy proceedings.

Finally, consider income. If you file independently, both parties income will be counted, just as if both you and your spouse file joint then both parties income will be considered. While you may be able to qualify for Chapter 7 bankruptcy individually, you may not qualify jointly.

How to File for Bankruptcy

Knowing whether to file jointly or independently also depends on what type of bankruptcy you prefer. While chapter 7 can more quickly discharge debts, its focus on liquidation puts assets at risk. Chapter 13, on the other hand, requires more time until debts are discharged, but centers on reorganization, so your property is kept safe.

In any case, you should consult a bankruptcy attorney to advise on the best option for you and to ensure the correct paperwork is promptly filed. The sooner you get started, the sooner you can get back on track financially.

If you need a bankruptcy attorney in Honolulu, HI, look to Greg Dunn, Bankruptcy and Debt Relief Attorney. A native of Oahu, this bankruptcy attorney has served the island since 1996, helping local residents with over 12,000 bankruptcy cases. Known for his approach to blasting debt away, he will find the right solution for you. Find out more about his experience online. For a consultation, call (808) 524-4529.