When a married couple in Florida struggles financially, one option for getting out of debt is for the spouse to file for bankruptcy. Filing for bankruptcy can provide some relief by stopping creditor harassment and allowing the debtor to reorganize their finances under the court’s protection.
However, there are some things to consider before making this decision. We will discuss what will happen when a spouse files for bankruptcy and alternatives to filing.
What is chapter 13 bankruptcy?
Before continuing with the discussion, let us look at chapter 13 bankruptcy. Chapter 13 bankruptcy is also known as debt adjustment for individuals with regular income. It gives individuals with a regular income the chance to repay all or part of their debts. This type of bankruptcy usually lasts for three to five years.
With chapter 13 bankruptcy, the court will appoint a trustee to oversee your repayment plan. The trustee will collect your monthly payments and distribute the funds to your creditors.
Personal or joint bankruptcy
If you are married and considering filing for bankruptcy, you may be wondering if your spouse will also have to file. The simple answer is no. Your spouse is not required to file for bankruptcy with you.
One spouse can file for personal bankruptcy so the non-filing spouse does not have their own bankruptcy affecting their credit score. Aside from protecting your spouse, you can also file personal bankruptcy if the debts are in your name or you want to keep your finances separate. An existing prenuptial agreement can also be a factor when filing for personal bankruptcy.
However, there are certain situations where it might be beneficial for your spouse to file. For example, if you are married and both are responsible for the debts, your spouse may want to consider filing. By filing bankruptcy, both of you will be protected from creditors.
Can a spouse file a chapter 13?
When it comes to bankruptcy, a few different options are available to a person. One of those options is Chapter 13. This type of bankruptcy is designed for individuals who have a regular income, and it allows them to find a way to repay their debts over some time.
To qualify for Chapter 13, an individual must have a regular source of income, and their debts must be below a certain amount. Additionally, they must also be able to make payments on their obligations according to the repayment plan that is set up.
If an individual meets all of the requirements for Chapter 13, they can file for bankruptcy independently. However, if they are married, their spouse may also need to file for bankruptcy.
How can married couples file for bankruptcy?
If you and your spouse are considering filing for bankruptcy in Florida, you may be wondering if both of you have to file. The answer is that it depends on your particular situation.
If you and your spouse jointly own property or have joint debts, then it may be beneficial to file for bankruptcy. All of your joint assets and debts will be included in the bankruptcy, and you can both start fresh financially.
If you and your spouse do not jointly own any property or have any joint debts, then it may not be necessary to file for bankruptcy. It may be best for only one spouse to file in this case. The non-filing spouse will still be responsible for any debts in their name, but the filing spouse will be protected from creditors.
What are alternatives to filing bankruptcy?
You and your spouse can consider a few alternatives to filing bankruptcy if you’re struggling with debt in Florida. These include:
- Negotiating with creditors – You may be able to work out a payment plan or settlement with your creditors outside of bankruptcy.
- Debt consolidation – If you have multiple debts, you may be able to consolidate them into one loan with a lower interest rate.
- Credit counseling – A credit counselor can help you develop a budget and work out a repayment plan with your creditors.
- Debt management – Similar to credit counseling, debt management involves working with a company that will negotiate with your creditors on your behalf.
- Personal loan – Taking out a personal loan can help you consolidate your debt into one monthly payment.
If you’re considering filing for chapter 13, consult an experienced Miami bankruptcy lawyer first. For more than three decades, the Bankruptcy Law Offices of James Schwitalla, P.A., has helped clients navigate the often-confusing process of filing for bankruptcy. Contact us today to schedule a consultation.