Chapter 7 for Married Individuals - How Does it Work?
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Chapter 7 for Married Individuals

If you’re married and considering filing Chapter 7 bankruptcy, it’s worth considering how your marriage will affect your filing. The two interact with each other in a few different ways so it’s important to know the differences between filing bankruptcy individually and jointly, as well as how your spouse’s income may affect your filing.

If you’re wondering whether filing bankruptcy jointly or individually will be better for your family you may want to meet with a bankruptcy lawyer:


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Chapter 7 for Married Couples: Individual vs. Joint Filing

If you’re filing for Chapter 7 bankruptcy, one major decision to make is whether you’ll be filing individually or jointly with your spouse. There are several factors that determine which is more prudent, including:

  • Amount of community debt (debt acquired within the marriage)
  • Nature of debts (credit debt, car loan, medical, mortgage)
  • Income sources
  • Types of property owned
  • The laws in your state

Chapter 7 bankruptcy also requires a means test to determine if you qualify. Typically, Chapter 7 is reserved for debtors who aren’t able to pay down their debts via regular monthly payments, as is done in a Chapter 13 bankruptcy filing.

A means test is one of the standards for determining whether someone is eligible to file for Chapter 7 – if your income is less than the median income of individuals in your state , then you likely qualify for Chapter 7. Whether you’re filing jointly or individually, your spouse’s income is typically taken into account when applying the Chapter 7 means test.

Differences In State Bankruptcy Law Regarding Marriage and Debt

As with any other avenue of bankruptcy law, your state bankruptcy laws make a difference in how debt is calculated. In most states, if you file bankruptcy individually your  joint debts will not be included in your filing and debts must be paid off. So one of the major state differences is in what’s considered joint debt.

Currently, there are two prevailing standards- “common law”  and "community property" states, and where you live will affect how your debts are calculated and may affect whether you choose to go with Chapter 7 or Chapter 13.

Marriage can be a complicating factor during bankruptcy, though having the support of a loved one can certainly ease the process. If you and your spouse are uncertain of the best way to file, though, you may want to talk to somebody who can analyze your situation and give you legal advice. Complete this form to find a local bankruptcy lawyer for a free consultation.


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