Debt, Marriage, and Bankruptcy

Regardless of their marital status, almost everyone in America has been affected by the economic downturn due to the coronavirus. Many married couples have found that hard financial times tend to increase their stress causing more marital problems. Financial issues are one of the leading causes of divorce in the United States. The uncertainty in our world right now and the economic insecurity and wondering if we will keep our jobs can combine to cause you to turn to bankruptcy.

Future Spouse

If you or your intended spouse have overwhelming debt and are considering bankruptcy to get the financial relief you may need to speak to a bankruptcy lawyer to see if it would be better to file before or after you get married.

Means Test

The means test is used to determine if a debtor has the money to pay back some or all of their debt. If you make less than your state’s median income, you should be able to file Chapter 7 liquidation bankruptcy eliminating all of your qualifying debt. If you get married and your income increases, you may not qualify to file Chapter 7 and would have to file Chapter 13 instead. Chapter 13 bankruptcy is a repayment bankruptcy where you will repay your debt in either a three or five-year court-approved payment plan.

Sometimes if your intended spouse has extra dependents that they will be bringing into the family, that could offset the filing rules, and you would be in a better position to qualify to eliminate your debt in bankruptcy.

Divorce

If your finances are in ruins and you and your spouse are considering divorce, again speaking to a bankruptcy attorney will give you the advice whether to file together or separately. If, after your divorce, your ex-spouse files Chapter 7 to eliminate their debt, that debt may land on your shoulders.

Bankruptcy laws can be complicated, and it can be tricky to know when is the best time to file to get the most benefit from your bankruptcy and achieve the highest amount of financial relief. Contact a Rio Grande bankruptcy attorney to find out when is the best time for you to file bankruptcy.