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Should I File for Bankruptcy Before Getting Married?

Deciding whether to file for bankruptcy is a significant and personal decision and becomes even more complex when you're planning to get married. Financial stress can have a profound impact on a marriage, so it's beneficial to start this new chapter on solid footing. Here are some important considerations to help you determine whether filing for bankruptcy before getting married is the right step for you and your future spouse.

Understanding the Impacts of Bankruptcy

Before making a decision, it's critical to understand what bankruptcy entails. Bankruptcy is a legal process designed to help individuals or businesses eliminate or repay their debts under the protection of the federal bankruptcy court. There are different chapters of bankruptcy, with Chapter 7 and Chapter 13 being the most common for individuals.

Filing for bankruptcy can offer a fresh start by discharging qualifying debts, but it comes with some considerable consequences. First, bankruptcy can significantly lower your credit score, which can make it harder for you and your spouse to secure a mortgage. Also, bankruptcy can stay on your credit report for 7-10 years. Both of these consequences can complicate joint financial ventures like buying a home.

You should consult with a bankruptcy lawyer to understand all the risks applicable to your situation. With this understanding, you can make the decision that’s right for you.

Individual vs. Joint Debt

One of the key factors in deciding when to file is whether your debt is individual or joint. Generally, the debt a person acquires before getting married is theirs alone. Any debt acquired after getting married becomes the joint responsibility of both spouses, regardless of which person created the debt.

For example, Person A has $10,000 in credit card debt before their wedding date. When Person A marries Person B, the preexisting debt belongs to Person A alone. Should Person A accumulate additional credit card debt after getting married, however, this added amount becomes Person B’s responsibility as well.

Filing for Bankruptcy Before Marriage

When you file for bankruptcy as an unmarried person, you assume all of the benefits and responsibilities that come with bankruptcy on your own. Filing on your own means that only your debts may be discharged and that only your credit score may be impacted.

If your spouse has good credit, low debt, and assets they’re bringing into your marriage, it may make sense to file for bankruptcy before getting married to avoid adversely impacting the benefits of their stronger financial situation.

Filing for Bankruptcy After Getting Married

When both you and your future spouse have a lot of previous debt belonging to each of you, it might make sense to file for a joint bankruptcy. Doing so can help both of you address your separate debts while tackling any joint debt you accumulated since your wedding.

Not only can this mean reducing your court costs by handling everything in one joint bankruptcy versus two individual filings, but you can also double the exemptions you by filing for bankruptcy as a married couple. The increased amount of exemptions can help both of you protect more property than either of you may have been able to protect alone.

Keep in mind that you can file for bankruptcy as an individual even if you’re married, but this might not make sense for everyone.

Seek Professional Guidance

Every situation is unique, and there are many nuances in bankruptcy law that may influence your decision. It's highly recommended that you and your partner seek professional advice from an experienced bankruptcy attorney who can assess your financial scenario and offer personalized counsel.

You can expect such service from Nguyen Law Group. Our attorney has the experience and legal skill necessary to guide you through the bankruptcy process, helping you seek the best possible outcome.

For more information or to schedule a free initial consultation, contact us today.