If you are married and in dire financial circumstances, you’ll need to consider the pros and cons filing for bankruptcy either on your own or jointly with your spouse.
This decision has lasting consequences, so it’s important to consult with a qualified legal attorney before filing a joint bankruptcy in Salt Lake City. Doing so gives you a comprehensive plan for moving forward and restores your peace of mind.
Both individual and joint bankruptcies are available in Utah. The most significant advantage to filing jointly is that joint debt is discharged, or erased, for both spouses. When filing individually, the filing spouse is absolved of debt, but the non-filing spouse is not. For example, if you and your spouse co-sign a joint credit card with a balance of $25,000, your spouse will still be liable for the balance if you file individual bankruptcy.
The filing fee is the same whether you file individually or jointly. Since most married couples share some debts, it could be beneficial to file a joint bankruptcy in Salt Lake City. Under Chapter 7, debtors normally keep all of their assets, although they sometimes must “buy back” the value of non-exempt assets. In Utah, exemptions are doubled for married couples filing jointly to further protect such necessary assets as homes, automobiles, and trade tools.
If you’ve experienced a hardship such as losing a job, you know all too well that your finances can quickly spiral out of control. Chapter 7 bankruptcy is a way to erase, or discharge, significant unsecured debts such as credit cards, hospital bills, or any other debt that is not secured by collateral. Your inability to pay even the minimum payments usually indicates it is time to file a Chapter 7 bankruptcy.
The main disadvantage with Chapter 7 is that non-exempt assets could technically be seized to repay creditors, although debtors are normally given the option of buying back the value of non-exempt assets. Exempt assets are defined under both federal and state law, although Utah does not allow the use of federal exemptions. For a comprehensive overview of the exemptions afforded to Utahns filing bankruptcy, download our up-to-date report. Bankruptcy laws are complicated, and anyone considering filing a joint bankruptcy should get the advice of an experienced local lawyer.
If your income is stable, but a single catastrophe such as a medical emergency devastates you financially, a Chapter 13 bankruptcy may be your best choice to manage debt. Chapter 13 allows you bring delinquent home mortgage payments current, reamortize car payments over 36 to 60 months at a low interest rate and requires you to repay only the general unsecured debts you can afford. Most unpaid debts are eliminated at the end of the plan. The goal of a Chapter 13 Plan is to adjust your cash flow to match your income.
The first step in filing a joint bankruptcy is to talk with an experienced Salt Lake City lawyer about whether filing a petition is the best option. After this initial meeting, you’ll need to gather any information your attorney needs to file a bankruptcy petition for either Chapter 7 or Chapter 13.
After your attorney files the petition, creditors are prevented from contacting you to collect debt. This means that harassing phone calls and threats of garnishment, repossession, and foreclosure stop. You and your lawyer will meet with a trustee who examines your case in detail. Then, you’ll await discharge of your bankruptcy. In the case of Chapter 7, a discharge is only two to three months after the meeting.
Couples facing money problems are under constant stress to pay their debts. An unforeseen disaster, such as illness or a sudden expense, leads to dire financial circumstances. Fortunately, bankruptcy laws are meant to help you get back on your feet.
If you are considering filing a joint bankruptcy in Salt Lake City, call our experienced lawyers today to learn more.