In bankruptcy, it is sometimes possible for multiple parties to have their cases dealt with together. This can happen by joint administration or joint petition. In this article, we define both of these terms and explain how they apply to bankruptcy law.
Joint administration, also known as administrative consolidation, is a court-approved mechanism under which multiple cases can be administered together. It can happen as long as there are no conflicts of interest and the separate parties can pool their resources and hire the same professionals.
In bankruptcy law, joint administration is when multiple bankruptcy estates can be managed under one docket for the purposes of administrative convenience, increased efficiency, and reduced expenses. It’s commonly sought out as part of the first-day relief in cases with affiliated debtors.
In a jointly administered bankruptcy case, the following applies:
A joint petition is when multiple parties, usually a married couple, file a formal request to the court together asking for an order or ruling on a particular legal matter. The term is most often used in the context of divorce, but it can also be used in bankruptcy law.
In bankruptcy, a joint petition is when an individual and their spouse file a single bankruptcy petition together. This means that the spouses file only one set of papers and disclose both their incomes, expenses, and debts on one bankruptcy schedule.
Note that if a married person is filing bankruptcy, this does not mean their spouse must do the same. Similarly, while married couples are allowed to file a joint petition, they are not required to do so. If they want to file separately, they can.
The benefits of filing a joint petition include:
If you are married and planning to file for bankruptcy, it’s recommended to speak to an experienced bankruptcy lawyer to help evaluate you and your spouse’s financial situation in order to see if it’s a good idea for you to file a joint petition.