Georgia Lawyers Divorce, Family Law, Bankruptcy, Business, ImmigrationMarried and thinking about filing for bankruptcy? Well, then you may want to consider filing a joint bankruptcy petition with your spouse. After carefully assessing your financial status, it is for your spouse and you to decide whether filing a joint bankruptcy petition will be in your best interest.

What is Joint Bankruptcy Petition?

During the filing of Joint Bankruptcy Petition, single set of bankruptcy papers are filed with the court. Under the Bankruptcy petition, spouses are required to disclose debt, income, and expenses shared between both spouses.

Deciding Whether Spouses Should File a Joint Bankruptcy Petition

Before deciding whether to file a Joint Bankruptcy Petition, several factors need to be considered including, but not limited to:

  • Amount of Property owed
  • Joint debts shared
  • Exemption laws of the state

Lastly, it is important to keep in mind that just because a couple is married, it does not obligate or even entitle them the right to file for a joint bankruptcy.

How to treat debts in a Joint Bankruptcy case?

When filing for Joint Bankruptcy, all debts owed by the spouses is to be listed in the petition, including all debts owed individually by you and your spouse. If a joint bankruptcy petition is filed, both of the dischargeable debts can be likely wiped out without the need of filing individual bankruptcy petitions. It is important to keep in mind that the type of debt involved can significantly impact whether a joint bankruptcy is in your best interest.

What effect does a Joint Bankruptcy have on your property?

Similar to the debts required to be disclosed on the bankruptcy petition, the parties are also required to disclose all of their property, with no exceptions. Even if the couple have separate property owned individually by either spouse, when filing for joint bankruptcy, all the separate property becomes part of joint bankruptcy. However, complications may arise if the value of the combined assets is greater than the exemptions available in bankruptcy.  However, this is not usually a problem as Georgia has rather generous exemptions for assets in a bankruptcy case, as the vast majority of filers can keep all of their assets and still get a bankruptcy discharge.  A list of the Georgia bankruptcy exemptions can be seen here:  O.C.G.A. 44-13-100

Benefits of Filing for a Joint Bankruptcy case

Before filing for joint case, several benefits should be considered:

  • Lower overall costs: By filing one bankruptcy petition, you can save on the filing fees. Attorney fees can also be saved by filing for one joint petition instead of two individual bankruptcy petitions.
  • Elimination of dischargeable debts: If only one spouse files for bankruptcy, non-filing spouse will still be liable for the separate debts and share of any joint debts and share of any joint debts. By filing for joint bankruptcy, dischargeable debts owed by you and your spouse can be wiped out.
  • Efficiency: By filing a joint case, efficiency is likely to be achieved as the documents are to be gathered only once, and the mandatory meetings can be attended jointly, saving more time and effort on both spouses’ end.

Disadvantages of filing a Joint Bankruptcy case

  • Failure to exempt all combined assets: If the value of the combined assets exceeds bankruptcy exemptions, ability to exempt most of the combined assets might be not be feasible. List of Georgia Bankruptcy Exemptions: O.C.G.A. 44-13-100.
  • Too much priority debts (such as taxes, etc.): One spouse owns too much priority debt, which as a result can lead to increase in plan payments (only applicable in a Chapter 13 case). Thus, if the income is not high enough to pay the debt through repayment plan, filing individually for bankruptcy might be a more feasible option.
  • Recent and previous discharges: If the couple chooses to file for bankruptcy jointly, and it is evident that one spouse has recently received a discharge in another case, then filing for joint bankruptcy is not an option available to the couple.

Agreement Between the Spouses to File a Joint Bankruptcy

Are the parties in total agreement with the rewards, risks and the goals of filing?  Do the parties agree on the attorney that will file the case, when it will be filed and the reason for filing?  Do the parties agree to file together, attend the trustee hearing together and cooperate with all the required disclosures, credit counseling courses, etc.  While the vast majority of joint bankruptcy cases do not have problems, if the parties are not in agreement about the case then problems could arise.

This article highlights the advantages and disadvantages of filing a joint bankruptcy petition. Regardless, it is important to keep in mind that this article is provided for information purposes only. It is advised that you consult an experienced bankruptcy attorney before deciding whether filing the joint bankruptcy petition is an option for you or not. Call us today at 470-947-2471 to speak with a caring and experienced bankruptcy attorney.

Updated: 2017-09-05