**Guest article, scroll to bottom for author bio
In case of filing chapter 7 or chapter 13 bankruptcies separately, it will take a debtor anywhere from several months to 2-3 years to complete the process. However, if the debtor is married, then it is better for him/her to file a joint bankruptcy petition along with his/her spouse; doing so will save both of them a lot of money and time.
So, if you’re married and contemplating to declare insolvency, then opting for a joint bankruptcy makes more sense, but you’ll have to know implications of doing the same.
What do you understand by the term ‘Joint Bankruptcy Petition’?
Joint bankruptcy petition refers to the mutual declaration of insolvency by you and your spouse. In other words, when you and your spouse file for bankruptcy in a single set of insolvency petition at a bankruptcy court all at the same time, then that’ll be regarded as a joint bankruptcy petition.
As is the case in any bankruptcy proceedings, both of you will have to declare whatever assets you own, total debt obligations both of you have, total spousal income and monthly discretionary as well as non-discretionary costs in the petition.
What will be the effect of joint petition on your properties?
As per the bankruptcy code, it is mandatory for the debtors to disclose the details of all the assets they own, including both of you as well. So, you and your spouse must make a list and write down all the details of the properties owned either separately or jointly, and provide the same with the bankruptcy papers. It must be noted that properties owned by anyone of you will be considered as joint asset in case of joint bankruptcy petition. As a result, you may run into trouble, if the value of all your assets surpasses the exemptions provided in your state of residence.
What will happen to your financial obligations?
If you have filed a joint bankruptcy petition, then you as well as your spouse will have to mention all the debts owed by each one of you. Moreover, you are liable to mention joint debts as well in this regard. However, by the virtue of a single joint bankruptcy petition you’ll no longer have to file bankruptcy separately in order to rid yourself of all the dischargeable debts. In this case, the viability of filing bankruptcy jointly will depend on the type of debts owed by each one of you either separately or jointly.
Is there any possibility to multiply the amount of exemptions in case of a joint bankruptcy petition?
There are selected few states that permit its people to take advantage of the federal exemptions. So, you need to reside in one of those states where they have such a provision that’ll allow you to opt for the federal exemptions. If you happen to live in one of these states, then you can definitely double the amount of exemptions that are provided under joint bankruptcy cases. However, if you are unable to enjoy the federal exemptions or prefer not to, then whether or not you can increase the amount of exemptions will depend on the relevant laws prevalent in that region.
So, you should always keep this one thing in mind when filing join bankruptcy petition: Most states won’t let you exploit the provision of federal exemptions and double up the amount of assets you can save from being liquidated to meet the obligations of your creditors. In addition, if you are hell bent to double the amount of exemptions on a particular property, then it must be jointly owned by both of you.
Finally, opting to file for joint bankruptcy petition will qualify both of you to get a discharge from all the debts as per the bankruptcy code. However, if any one of you has excessive amount of priority debts like child support, alimony or even taxes, then these obligations have to be met in full in case of a jointly filed bankruptcy petition.
Author’s bio: Sophie Kinsella is associated with Oak View Law Group and has contributed to various other financial websites. Some of the topics she has written on are debts, debt pay off, debt relief options, divorce, SEO, taxes and so on.
Article summary: Debtors can speed up their debt relief process and save both time as well as money by opting to file for joint bankruptcy petition. However, there is a lot of difference in the procedure followed to discharge them of their financial obligation in case of a joint bankruptcy petition and that of a separate one.
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