A husband and wife can file a joint case under Chapter 7, 11, 12 or 13. Both names are on the same petition and schedules, and only one filing fee is due. Only spouses are allowed to file a joint petition. Former spouses, partners or other relatives do not qualify for a joint petition. Whether a husband and a wife should file a bankruptcy together depends on whether both are liable on the debts involved. Filing bankruptcy generally only protects the person who filed the bankruptcy. Married couples who are jointly liable on most debts should file a joint bankruptcy. On the other hand, if only one spouse is liable on most of the debts, the indebted spouse may file an individual bankruptcy, and in most cases, the individual debtor's bankruptcy will have no adverse effect on the non-filing spouse.
Court Determination to Consolidate
When a joint petition is filed, the court determines whether the cases should be consolidated. Even though the petition is ''joint,'' two separate cases exist. The court can order the appointment of a different trustee for each debtor if necessary to protect the rights of creditors of each of the joint debtors. Even if the same trustee is appointed for both estates, the estates must be accounted for separately. This is important when one spouse has more property than the other or the interests of creditors of each are different.
Intermingled Property and Liabilities
In most cases involving spouses who file a joint petition, the property and liabilities of each are so intermingled that consolidation is appropriate. Consolidation combines the property of both debtors and combines the claims of creditors of each. The court will consider whether there will be a detriment or a windfall to creditors if cases are consolidated. The court will not consolidate if adverse treatment of either spouse's creditors will result.
Separate Treatment and Dischargeable Debts
The fact that spouses have filed a joint case does not mean that they are agents for each other or that the acts of one are imputed to the other. Thus, conduct giving rise to a nondischargeable debt or to denial of a discharge for one spouse will not by itself result in denial of discharge to the other spouse.
Married Debtors and Election of State or Federal Exemptions
Married joint debtors or married debtors whose cases have been consolidated may each claim a set of exemptions. They may use either state or federal exemptions, if federal exemptions are allowed, but one spouse cannot use state and the other federal exemptions. If spouses are unable to agree then they are both deemed to have elected federal exemptions if allowed in that state.
Copyright 2005 LexisNexis, a division of Reed Elsevier Inc.
