If you are considering filing a Chapter 7 or Chapter 13 bankruptcy and you are married, you must decide whether you will file jointly as a married couple or if only one of you should file. There are numerous factors to consider in making this decision. For example:
- How debt is held. If the majority of your debt is owed by only one spouse, it may be beneficial for only that individual to file a case. It would allow that spouse to discharge all of the debt held solely in his/her name as well as his or her share of the joint debt. If only one spouse files a case, the non-filing spouse remains liable to pay the debt held jointly, as well as his or her own personal debt.
- How assets are held. Another important factor to consider is how assets are held under the applicable state law (equitable distribution or community property). New Jersey is an equitable distribution state. It is also essential to determine how title to the property is held (ie: joint tenancy, community, etc.).
- No transfers. A debtor cannot transfer property to his/her spouse before filing a bankruptcy case to prevent the asset from being included in the bankruptcy. This would be considered a fraudulent transfer. If the transfer of property is determined to be fraudulent, then the property will be considered an asset of the bankruptcy estate and you could be in big trouble for trying to exclude it.
It is important that you discuss filing jointly or separately with your bankruptcy lawyer at Levitt & Slafkes, P.C. If you are interested in learning more about bankruptcy cases or how filing one can benefit you, contact Levitt & Slafkes, P.C. We are experienced in handling a variety of bankruptcy issues. Our offices are conveniently located in South Orange, New Jersey. Please call us at 973-323-2953 or online to schedule your free initial consultation today.