When married people file for bankruptcy, they often want to know how it will affect their spouse. After all, just about everything is shared in a marriage. Debts can be shared too. How exactly your filing for bankruptcy can affect your spouse’s finances can vary, so it is wise to get a professional opinion on the matter. Consult with a New City, New York bankruptcy attorney and know exactly what kinds of effects your bankruptcy proceedings could have on others.
Will My Spouse’s Debts Be Affected When I File?
This is a common question people ask when filing for bankruptcy on their own. If you file for bankruptcy, it should only affect your debts. So if you have credit card debt and the accounts are only in your name, that is your debt. That could be discharged during bankruptcy, but your spouse would continue to hold any debt they already have.
Can Any Assets of My Spouse Be Taken During Bankruptcy?
Just as their debts would stay the same, your spouse’s assets should also be unaffected if you file for bankruptcy on your own. So if they have a vehicle, a home, or another asset that is just in their name, it should not be affected or considered when you file for bankruptcy on your own.
There can be exceptions to this general rule though. This is why it is a good idea to talk to an attorney before you start this process.
Will My Bankruptcy Lower the Credit Score of My Spouse?
A bankruptcy filing would only appear on your credit report. So it should not affect your spouse, their credit score, or their ability to get a loan in the future. If your spouse does end up taking a hit to their credit score after you file, you should address that with the major credit reporting agencies.
When Should I File Bankruptcy With My Spouse?
Sometimes you and your spouse would actually just be better off filing for bankruptcy together. You should consider jointly filing if:
Your spouse has an income: Even if your spouse is not filing, their income can be considered when you file for bankruptcy. That can interfere with you if you were planning to go with Chapter 7 bankruptcy.
You plan to divorce: In some cases, dealing with joint debt now can be easier than trying to divide it up during a divorce.
You have property and assets you want to keep: Contrary to popular belief, you do not have to give up everything that you own when you file for bankruptcy. There are exemptions for some assets and filing together can allow both you and your spouse to maximize your exemptions.
Talk to Our Bankruptcy Attorneys
So if you are thinking about filing for bankruptcy and you want to be aware of any potential consequences, contact the Lauterbach Law Firm. Our seasoned attorneys can help you navigate this process and brighten the outlook for your financial future.