Should Both Spouses Need to File for Bankruptcy in Nevada?

This question has been asked many times, and once again, I like to answer it here. Whether married couples in debt should both file for bankruptcy depends how much indebted they are. For instance, if one spouse is not heavily indebted and just has few debts, there is no need to join her in the petition. You may have a separate debt and you might have carried debtors before the inception of your marriage and in that case you are solely liable on debts. Remember, Nevada is a community state and each spouse is responsible for the other debts — but only community debts and not individual debts. A student loan can be an individual debt. Also, a mortgage debt can be an individual debt, but once the other spouse starts paying it, (it is tricky here) it becomes community property and a community debt. A debt may be a joint debt if both spouses signed a contract for the debt. The examples are again, a mortgage, a swimming pool construction debt, and also if students loan are unified. Make sure if both spouses had co-signed a debt, then both are individually and jointly responsible (recall individual and several responsibly).

Nevada is a community property jurisdiction, however, in community property state like Nevada, the general rule is that the income of both the spouses considered community property. And all of the community property is available to pay off the community debt, there is no escape from your creditors. If you and your spouse both file for bankruptcy, then the bankruptcy will eliminate each other’s debt as well as joint marital debt i.e community debt. It is a good idea to file bankruptcy jointly, if you are heading toward divorce. It is less contentious and of course a bit cheaper in Bankruptcy Court compared to a family court in Nevada. There are other advantages to file jointly as you have to pay only one case fee instead of two case fees if filed separately. The disadvantage is that both spouse had high derogatory marks on their creditor reports. In case, only one files, the other can safe his/her credit and can seek loans down the road.

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