Planning a wedding can be one of the most critical moments of your life. If you are dealing with your debt or your fiancé’s debt during this process, it can be overwhelming and stressful. If you have marriage and bankruptcy on your list, it will be essential to decide what should go first and why. It’s a good idea to get professional help; in this case, a bankruptcy lawyer can help you navigate the bankruptcy laws and your circumstances.
Filing for bankruptcy before marriage
If one of you has an unmanageable debt and the other doesn’t, it can be a good idea to file for bankruptcy before the marriage. This can reduce the impact on the other partner’s credit score. Getting married does not change your personal credit history, so filing for bankruptcy as an individual will not impact your partner’s credit, whether you’re married or not. Partners will only get affected if there is a joint debt, such as a co-signed loan.
If you are already married and are considering filing for bankruptcy
Married couples can choose whether to file for bankruptcy together or individually.
Some things to consider are the value and type of properties and bills you own together and separately. Also, knowing the exemption laws of your state will determine which assets you can keep. Filing jointly may give you more exemptions than filing separately.
Time involved in different bankruptcies
The chosen bankruptcy type will significantly affect the whole process, so make sure you understand the primary differences between Chapter 7 and Chapter 13 bankruptcy. Otherwise, you may find yourself committed to your ex for three to five years paying on a Chapter 13 bankruptcy.
Divorce and bankruptcy
One of the most contested issues in divorce proceedings is the division of assets. Unfortunately, people don’t think about what happens to their debt when they split, but this can be just as important!
Paying off all debt before filing for divorce is the ideal scenario, but that does not happen very often, the most critical factor in determining debt division is applicable state law, with most states being “common law property” states, meaning that, generally, debts in the name of one individual will remain under his responsibility after divorce.
If, after divorce, one spouse files bankruptcy, the creditors on joint accounts may go after the other spouse for the entire debt.
Before you consider marriage or divorce and you have overwhelming debt, contact a Fort Worth bankruptcy attorney.