Bankruptcy is an elaborate procedure that requires a lot of procedure. Even the filing process is also different depending on specific cases. Among these filing procedures is going for joint petition. Individuals planning to declare bankruptcy ask what is joint petition and consider if it’s the right one for them.
An Introduction to Joint Petition
Joint petition is when a couple files for bankruptcy. This can be filed in cases whether an individual solely has debts or if an individual and his spouse both have debts to settle. Joint petition can be filed under different chapter like Chapter 7 Bankruptcy and Chapter 13 Bankruptcy. There will be some differences in the filing process as well as eligibility depending on the chapter where bankruptcy will be filed.
Joint Petition Debt Settlement
A joint petition can be the best solution for couples facing a number of financial issues. Nevertheless, it doesn’t mean that it will be the most beneficial option. Money owed to different entities and by individuals will make this move less beneficial than it should be. Therefore, considering this procedure will require a great deal of consideration.
Filing Process and Related Documents
The filing process starts by listing all the debts owed individually and as a couple. All assets, income and other expenses must also be disclosed as part of the filing process. Couples who think of filing for joint petition should consider that choosing this procedure will treat all the properties as joint properties even if they are individually owned by each partner. The fact that properties are considered as combined assets in this case may work to petitioners’ advantage. However, this can be a huge loss for both petitioners combined assets are lower compared to the available exemptions for assets. All exemptions available will only be treated as a single exemption, instead of double exemption. There are ways to double exemptions, but this depends on federal rules per state.
Advantages and Disadvantages
Filing for joint petition has its advantages. First is it’s more convenient because it would only require single filing process, unlike if both individuals will file individually.
Another advantage is the cost that comes with the filing process. Joint petition will only have almost the same filing process cost. Therefore, people don’t have to worry about possibly doubling their filing process costs with joint petition.
Finally is protection advantage in debt collection. The common scenario is if an individual files for bankruptcy, his spouse won’t often get off the hook because creditors might go after her for payment. Joint petition will boost protection for both parties, ensuring exemptions that will be useful in the future.
As for disadvantages, filing joint petition will mean that couples will have bankruptcy on their records even if only a spouse had debts to settle. This limits protection in a way and probability of getting discharged from the debt.
Overall, filing for a joint petition can be efficient and protect debtors. However, using it inappropriately will result to more problems like exemptions and other instances that will prevent future debt discharge. Ask a bankruptcy lawyer to know whether joint petition will work for you or not.