Should Married Debtors File Jointly?

by Hermin Dowe on January 21, 2013

Hispanic couple working in home office

Married debtors commonly ask whether they should file jointly or separately for bankruptcy protection. The answer depends primarily on whether a majority of the debt is in one spouse’s name only. If it is, then it may be beneficial for that spouse to file individually. This will eliminate the debts in that spouse’s name, plus his or her share of any jointly held debts.

Filing jointly may be the best option for spouses who both have significant debt. If only one spouse files, then the non-filing spouse is still required to pay back his or her debts, including his or her share of joint debts. Additionally, the non-filing spouse must disclose his or her income in the bankruptcy.

Another important factor to consider is whether the couple’s property is community property or common law property. Most of the states apply the common law rules but you should check to see which rules are used in your state. California uses the community property rules. It is also essential to determine how title to the property is held (e.g.: joint tenancy, community, etc.).

Beware that the bankruptcy court will investigate to determine whether the property was transferred to the non-filing spouse for the sole purpose of making it exempt from seizure. Typically all transfers within one year prior to the bankruptcy filing will be considered fraudulent and the property will be brought into the bankruptcy.

Deciding whether one or both spouses should file for bankruptcy involves a comprehensive legal analysis of numerous issues. A qualified bankruptcy lawyer can help you make this decision. To ensure that you use the most advantageous legal strategy, call the Dowe Law Firm at 510-233-7700. We offer a free consultation for prospective bankruptcy clients. You can also visit our website at

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