Are you considering bankruptcy? You may be struggling under the weight of unmanageable debt, looking for the best way to relieve your financial burden. For many people, bankruptcy eliminates thousands of dollars of debt, ends debt collection attempts, and provides filers with a fresh financial start.
But what if you’re married? Can you file bankruptcy yourself without including your spouse? If so, will your bankruptcy affect their debt or credit score? Will it threaten their assets?
You can file bankruptcy without your spouse, but it is important to understand how it may affect each of your financial situations.
Understanding Common Law Property Distribution
Florida is a common law property state, which means legal procedures like marriage and bankruptcy adhere to equitable distribution laws. In other words, when you buy property yourself, it is yours—even if you’re married. If you own it jointly with your spouse, each of you owns half of it.
When you file bankruptcy, therefore, all your separate property and your half of any jointly owned property will become part of the bankruptcy estate. The bankruptcy estate will not include your spouse’s separate property or their half of jointly owned property.
That said, a trustee may force the sale of one of your jointly owned assets if you cannot protect that asset with a state or federal bankruptcy exemption. If this occurs, the trustee will pay your spouse their portion of the proceeds and use the rest to repay your creditors.
When the court discharges your debt, your spouse will still be fully responsible for their separate debts and their portion of any joint debts.
Filing a Joint Petition
If both you and your spouse are interested in filing for bankruptcy protection, you may consider filing a joint petition.
This can help you save both time and money because:
- You only submit one set of papers;
- You will most likely attend only one hearing; and
- You may save on attorney’s fees.
Florida is one of the states that does not allow bankruptcy filers to use federal exemptions. There are different advantages and disadvantages to having to use state instead of federal exemptions. To determine whether a joint or separate bankruptcy petition is right for your family, get in touch with an experienced professional to take a closer look at your debts and assets.
Personalized, Strategic Support
Are you and your spouse struggling to make ends meet? When you bring your financial crisis to Buchalter & Pelphrey, we can sit down with you and determine whether bankruptcy is your best course of action. If so, we can discuss the pros and cons of filing jointly versus filing separately. Our goal is to develop a highly effective, individualized strategy that meets your present and future needs. When you contact our firm, you can trust that your case is in the best possible hands.