A bankruptcy case starts when an individual, a married couple, or a business files an official form called a petition with the bankruptcy court. A married couple filing together will submit a “joint petition.” A joint petition contains the financial information of both spouses in one set of documents.
Couples often file together because it can be more efficient. For example, filing a joint petition comes with the following benefits:
Are married couples required to file jointly? No. Married couples are not obligated to file together. If one spouse needs bankruptcy protection, an individual filing might make sense. The indebted spouse can wipe out qualifying debt while leaving the non-filing spouse’s credit score intact. In that case, the couple will stand a better chance of getting a lower interest rate on future credit purchases when it’s time to buy a house or new car.
Do I have to include my spouse’s income if I file an individual petition? Sometimes a couple’s combined income will be too high to qualify for a discharge in Chapter 7 bankruptcy and they’ll wonder whether they can obtain a strategic edge by filing individually—specifically, whether they can bypass the Chapter 7 income eligibility requirements. It doesn’t work. If you’re married, you must include your non-filing spouse’s income in the means test calculation—the test that determines if you qualify for a discharge. If you find yourself in this situation, you’ll want to consider whether the bankruptcy relief afforded in a Chapter 13 bankruptcy will work for you.
(You can download a fillable Voluntary Petition for Individuals Filing for Bankruptcy form from the U.S. Court’s website.)