Many people that are considering filing bankruptcy own property or hold debts with another person. This may be a jointly owned home, perhaps with a spouse, or any other type of property. There are many different ways someone else could have an interest in the loan or the property, ranging from co-signing on the loan to joint ownership of inherited property. While this is meant for informational purposes, and cannot substitute for legal advice, we assure you that no matter what your situation we have the experience and knowledge to get you through it if you give us a call!

The most important issue to understand if you are considering filing for bankruptcy is that the filing only impacts your personal financial responsibility for the debt. It doesn’t directly impact the ownership of the property in question (though we will discuss that more at your consultation) nor does it impact any other party’s financial responsibility or ownership directly. In English, what this means is that if you have a co-signor on a car you want to get rid of in your bankruptcy the co-signer is still financially responsible for the full amount of the loan. Now, if that person is also on the title he/she still has an ownership interest in the property also

As a general rule this is a reason that married individuals with joint debts are encouraged to file a joint bankruptcy petition. If a house is foreclosed and only the wife files the husband is still responsible for any deficiency on the mortgage. Now, there are also any number of reasons spouses may not want to file together ranging from an impending divorce to the fact that only one party has substantial debt. That is certainly your decision, we just want to make sure you know your options and the possible outcomes of either decision.

There are also some differences if you wish to file a chapter 13 bankruptcy. If a husband and wife own a house together and are facing a foreclosure one party filing for bankruptcy is sufficient to halt the foreclosure and all of the arrears can be paid through the chapter 13 bankruptcy plan. But, the filing spouse cannot include any debts into the plan that are solely the debts of the non-filing spouse. Of course, the debts and payments will be worked into your budget and calculated into the ability to repay certain debts.

If you have questions about this, or any other bankruptcy matter, please contact your St. Louis Area Bankruptcy Attorney today to set up your free, no obligation, consultation with one of our experienced attorneys!