“Joint” Bankruptcy Filings — Special Considerations for Married Couples

Section 302(a) of the United States Bankruptcy Code permits legally married couples to participate in special “joint” filings.  Bankruptcy Rule 1015(b) governs the joint administration of a jointly filed case.  Joint filings by husband and wife are in reality two bankruptcy cases which are administered as a single case for the sake of judicial economy. 

Because husband and wife file a single bankruptcy case pursuant to these rules, only one filing fee is paid to the Clerk.  These days, considering the fact that the filing fee for a Chapter 7 case is $299 and for Chapter 13 is $274, this results in signficant savings.  In addition, most bankruptcy lawyers will charge a single legal fee to jointly filing spouses since the joint administration of the cases usually results in economized case handling.

Married couples should consider a jont filing when most debts are jointly held between them.  This frequently happens in the case of credit card debts, mortgage loans and motor vehicle loans. 

If a married couple has joint debts but for some reason only one spouse decides to file for bankruptcy, the non filing spouse will need to remember that he or she will continue to be on the hook for the entire balance of the joint debt.  If the filing spouse files a Chapter 13, the non filing spouse will be protected during the time that the bankruptcy case is pending by virtue of the Co-Debtor Stay imposed by Section 1301 of the United States Bankrutpcy Code.  With regard to the co-debtor stay, the non filing spouse should be mindful of two things: first, it only applies to consumer-type debts; and secondly, once the filing spouse’s bankruptcy is no longer pending as a Chapter 13 case, the non filing spouse will once again be subject to collection attempts. 

In the event that the marital union is unstable, spouses should advise their attorney of this fact and special consideration should be given to whether there is a real or potential conflict of interest between the spouses. 

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