Joint Accounts and Bankruptcy
April 19, 2023
When facing financial distress, filing for bankruptcy is among the promising solutions to help individuals, couples, and business owners achieve debt relief. However, different issues often arise when a person considering bankruptcy operates a joint bank account or co-owns a property with their spouse or family member. Therefore, understanding how your bankruptcy case will affect the other person is imperative before you file.
The Law Offices of David K. Blazek, P.C. provides legal assistance and advocacy to clients in bankruptcy-related matters. Attorney David Blazek can work to understand your financial issues, educate you about how bankruptcy affects joint bank accounts, and help you decide the right chapter for you. The firm proudly serves clients across Tampa, Jacksonville, Miami, and Orlando, Florida, as well as Atlanta, Macon, and Columbus, Georgia.
Bankruptcy Property Laws in Florida
According to Florida laws, a person filing for bankruptcy may be eligible to exempt all the equity (unlimited exemption) in their home or real estate property, which qualifies for a homestead exemption. In order to qualify for the unlimited exemption, you must meet the following requirements:
You must have owned the house or property for at least 1,215 days prior to your bankruptcy petition.
The property cannot be more than 160 acres or one-half acre in a municipality.
Other Property Exemptions
Additionally, you may also qualify for the following property exemptions under Chapter 7 or Chapter 13 bankruptcy:
$1,000 for personal property, including art, electronics, and furniture pieces.
$4,000 in personal property if you fail to use your homestead exemption.
$1,000 for a motor vehicle equity
Education savings and hurricane savings.
Disability income benefits
Tax credits and refunds
Most retirement accounts
Most public benefits
Health savings accounts
Prescribed health aids
Proceeds of a life insurance policy
Most government benefits
An experienced Florida bankruptcy attorney can enlighten you about the exemptions you’re entitled to and how each bankruptcy option affects the joint bank account holders.
How Joint Accounts Are Affected
Here’s how your bankruptcy petition can affect joint bank accounts:
In Chapter 7
In a Chapter 7 case, an automatic stay order will go into effect after your bankruptcy petition. This will help stop all collection efforts of the creditor or debt collector. However, the automatic stay order only protects the petitioner but not the joint account holder or cosigner.
While the creditor may be unable to go after you, they can direct all their collection efforts toward the joint account holder. To protect the joint account holder in a Chapter 7 case, you can reaffirm the debt or keep making payments until you repay the debts fully.
In Chapter 13
However, unlike Chapter 7, you will be able to protect the joint account holder and cosigner in a Chapter 13 case, provided that you keep repaying your debts through the Chapter 13 repayment plan. Also, a codebtor stay will go into effect once you file your Chapter 13 petition. Thus, protecting the joint account holder and cosigner on all consumer debts.
Determining Which Bankruptcy to Choose
To determine the right bankruptcy option for your unique situation when operating joint accounts or jointly owned property, here are some important things to consider:
What kinds of debts do you owe?
Will you be able to keep your house and vehicle in bankruptcy?
How will bankruptcy affect your spouse or joint account holder?
Are you filing for bankruptcy separately or jointly?
Do you have enough assets you want to protect?
How will bankruptcy affect your credit report?
Will bankruptcy stop creditor calls to the joint account holder?
Will bankruptcy actually resolve your debts?
Is there a more favorable debt relief option that can work better for your unique circumstances?
A trusted attorney can carefully evaluate your financial situation and help you make informed decisions about your bankruptcy case.
How a Dependable Attorney Can Help
Filing for bankruptcy is a life-changing decision that requires thoughtful consideration. Especially when you operate joint accounts with your spouse or family member, knowing how your bankruptcy petition affects the joint account holder is crucial to offer them the needed protection. Therefore, talking with a dependable bankruptcy attorney is crucial for clear direction and analyzing options.
Attorney David Blazek can inform you about your available exemptions, how bankruptcy affects the joint account holders, and help determine the ideal chapter for your unique financial situation. Also, Attorney David Blazek will help file your bankruptcy petition and represent you intelligently in every phase of the court proceedings.
Contact The Law Offices of David K. Blazek, P.C. today to schedule an initial consultation with a knowledgeable bankruptcy lawyer. Attorney David Blazek can assist with your bankruptcy filing and craft a strategic plan to protect your assets and joint account holder. The firm proudly serves clients across Tampa, Jacksonville, Miami, and Orlando, Florida, as well as Atlanta, Macon, and Columbus, Georgia.