What happens if you get into financial trouble and need to file for bankruptcy in Florida? Will your spouse be affected, too? Do you have to file for bankruptcy and risk ruining your credit if your spouse needs help getting out of debt? The answers to these questions depend on a few different factors.
While it’s true that many assets can be owned jointly in a marriage, both spouses don’t necessarily need to file. How the ordeal plays out, though, depends on the circumstances of your case.
File for Bankruptcy in Florida without Your Spouse
If you are married and are considering filing for bankruptcy on your own the form you choose is important. You can file for both Chapter 7 and Chapter 13 if you meet the criteria. The one that is best for you depends on a few different things. In both cases, the courts consider both spouses income. In Chapter 7, in which debtors liquidate assets to pay off debts, if both incomes exceed the income level set by law, you may not qualify for this type of bankruptcy.
Alternatively, Chapter 13 may offer debt relief for you or your spouse. In this type of debt relief, a trustee sets up a monthly payment plan to pay down your or your spouse’s debts. The amount of the payment depends on both spouses’ incomes.
How One Spouse’s Bankruptcy Can Affect the Other Spouse
So, how does the bankruptcy of one spouse affect the other? In short, it depends on how you own your assets and whether both spouses are in debt. For instance, if you file for Chapter 7 bankruptcy, any property that you and your spouse own together—such as any vehicles or real estate—will become part of the bankruptcy estate. These assets can be liquidated to pay down debts. If you hold debts jointly and only one spouse files, only the filing spouse’s debts will be discharged, which means the non-filing spouse will still have to pay.
One advantage of single bankruptcy filing for married couples is that only one spouse’s credit will be damaged. This is an important fact if you and your spouse need to make a large purchase in the future.
Should We File for Bankruptcy in Florida Jointly?
Marriage itself comes with many advantages, one of which is that you and your spouse can file for bankruptcy together and save time and money. Whether you should choose to file singly or jointly is largely a matter of which scenario is best for your situation.
If you are unsure whether to file for bankruptcy with your spouse or on your own, you should get in touch with an attorney. By working with someone who knows their way around the legal system and has experience dealing with cases like yours, you can increase your chances of a good outcome.
Want to learn more? Contact us today so that we can discuss your case before you file for bankruptcy in Florida.