Many struggling homeowners in Nevada who consider filing Las Vegas bankruptcy are married. The question of how the bankruptcy code addresses married couples is a common one, and rightly so. Married couples almost always take on debt together to purchase major items like cars and houses, and even if they don’t, the financial decisions to do so are based on both spouses’ incomes. Thus, here are several facts and strategies for married couples who are considering bankruptcy.
(1) The bankruptcy code does not require married couples to file jointly. Anyone who tells you otherwise is just plain wrong.
(2) There are times when it’s advantageous for only one spouse to file, especially if the problems are caused by one spouse’s debt, such as credit card debt. Indeed, in most cases, only one spouse files.
(3) Unfortunately, because Nevada is a community property state, if one spouse files on a debt he or she owes alone, the other’s credit worthiness will be affected.
(4) Nevertheless, in circumstances of joint debt, what happens is that the debt is discharged for the filing spouse. This might not sound like a great relief, but remember that there’s an eight-year limit between bankruptcy discharges. Some couples will want to “stagger” this period to their advantage. Even if the non-filing spouse keeps the joint debt current, his or her credit rating will not be affected.
(5) Often, having one spouse strategically file in Chapter 13 makes more sense than having both spouses file jointly. This allows the other spouse the opportunity to file later if problems arise.
(6) Also in Chapter 13, the automatic stay protects non-filing co-debtors for consumer debt, including spouses. This means that creditors cannot attempt to collect on a person’s debt if his or her spouse is the only person who filed.
In sum, the bankruptcy code allows married couples to use it to their advantage, which is something your Las Vegas bankruptcy lawyer will help you do.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Haines & Krieger Las Vegas bankruptcy attorney for a free initial consultation. Call us at 1-702-880-5554 to set up your free consultation.