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The Pros and Cons of Filing for Bankruptcy with Your Spouse

Last updated 2 years ago

Married couples considering bankruptcy must make the important choice of whether to file individually or jointly. Depending on the couple’s financial situation, one of these options may make more sense than the other. Here are a few of the pros and cons of filing bankruptcy jointly.


Filing a joint bankruptcy petition eliminates each spouse’s individual debt and any joint debt they have, allowing the couple to truly obtain a fresh start. If one spouse files separately, his individual debt will be discharged, as well as his portion of community debt, but the other spouse will still be responsible for her individual debt and her share of joint debt.


In Chapter 7 bankruptcy, debtors’ valuable property and assets are liquidated, and the cash proceeds are used to pay creditors as much as possible. If a couple files a joint bankruptcy, all of each person’s individual property, as well as their joint property, is subject to this liquidation process. If one spouse has significant property that he would like to protect, a joint bankruptcy may not be the best choice. This property would have to be sold. In cases like this, an individual bankruptcy might be a better choice, as this will only affect one spouse’s property.


Bankruptcy is the single most negative thing that can appear on a credit report, and it significantly lowers a credit score. A husband and wife who file jointly will both see a drop in their credit scores, making it difficult to obtain loans or get a credit card. However, if one spouse files for bankruptcy as an individual, the other will not see a difference in their own credit score.

Only an experienced attorney can help you decide if a joint or individual bankruptcy is right for you, so call (619) 234-3333 to schedule a consultation with a bankruptcy attorney at Golden State Law Group. We’ve received the highest possible rating from the Better Business Bureau, so rest assured that you can count on ethical business practices and straightforward advice from our staff.


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