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Should I File Bankruptcy Before or After I Get Married?
Planning a marriage or filing for bankruptcy are both steps that require critical thinking. There are definitely things to consider before filing. If you are going for both and can’t decide which one to do first, the result can be confusing.
But worry not, in this guide, we will tell you how you can decide. Surely, you don’t want to put any debt burden on your spouse. But you might also be confused about how getting married can affect your bankruptcy? There is one more thing you need to know.
Filing Bankruptcy before Marriage
Before marriage, you and your spouse are different entities for the government. So, your spouse doesn’t affect your bankruptcy. However, there are still some differences. Here are the two scenarios:
Chapter 7 – Bankruptcy
Chapter 7 is one of the most filed bankruptcy cases in America. It removes all the debts, including medical, utility bills, loans, and credit card debts. At the same time, taxes and student loans are exempted. But, it has one major drawback as you will see a dip in your credit score. It lasts for up to 10 years on your credit scores. Overall, it takes almost four to six months to complete the whole process.
Another term for Chapter 7 is the liquidation bankruptcy, as it is notorious for liquidation. But, the process rarely happens. There is a reason that three out of four bankruptcy filed cases in America are liquidation bankruptcies.
The foreclosure of your house or possession only occurs if your assets exceed the said amount. But normally, they don’t exceed, and liquidation doesn’t happen. This type is for those low-earning people without any stable income.
The main question is should you file a Chapter 7 bankruptcy before marriage? If you want to save your significant other from your debts, file Chapter 7 before the wedding. It would be better as your spouse’s assets will be excluded from the plan. And you can start your life stress-free.
One important thing to consider with filing bankruptcy is the cost and duration. Chapter 7 bankruptcy is often much cheaper than Chapter 13 bankruptcy. That said, the cost may be dependent on your location. For example, the attorney fee cost to file bankruptcy in California may be more expensive or less expensive than the cost to file bankruptcy in Kentucky.
Chapter 13 – Bankruptcy
Chapter 13 is the alternate option if you can’t file Chapter 7. It is, in other words, a wage earners plan or a continuous debt payment. This type is suitable for those who have a secure job and are getting regular monthly income, which helps pay off their debt in payable milestones.
But, at the same time, the plan has its drawbacks too. Chapter 13 lasts for up to 3 to 5 years. The plan depends on the total household income, expenses, and debt, after which the court decides the installment plan. So, it means that your household income is directly associated with your bankruptcy plan — and any changes in it can directly affect it.
Coming back to our question, should you file a Chapter 13 bankruptcy before your marriage? It won’t be a good option to file it after marriage. Although your spouse will be excluded from the plan, spouse income would still be counted in net monthly income. And ultimately, your plan payment will increase.
It can last up to sixty months, during which many things can change, especially in financial situations. Raises, diseases, children, or any mishap can increase your expenses. You need to report this very change to the trustee and court so that they can make amendments to your payment plan.
If you are wondering whether or not bankruptcy is the right choice for you, you may want to take a “Should I File For Bankruptcy Quiz,” to see if the option is your best choice. You will have the option to file a case individually after the wedding or file it together. However, both types will have different circumstances. In any case, should you go for filing Chapter 13 bankruptcy or Chapter 7? Let’s find out answers to your questions!
Chapter 7 – Bankruptcy
While filing for Chapter 7, your spouse’s assets may come under consideration. If both of you are under overwhelming debts, the better approach would be to file a joint bankruptcy. It will save you time and money. Since there will be only one case, both of you will save court fees and legal costs involved in the process.
Your spouse’s income will still be considered while evaluating your plan, even in an individual case. If your significant other has a high income, you won’t be liable for a Chapter 7. Therefore, filing for it before marriage can be a decent option. But keep in mind that you can’t make any expensive purchases because it will increase interest rates tremendously.
Chapter 13 – Bankruptcy
Filing a Chapter 13 after marriage can be beneficial, but a joint bankruptcy proves to be a more helpful approach. Since your spouse’s income has already been considered, you don’t need to report anything to the trustee. Both of you can pay the debt together.
File bankruptcy before or after I get married: which should you choose?
Filing for bankruptcy is not a pleasing experience, whether Chapter 7 or Chapter 13. It would be best to be cautious while planning any before or after the marriage. It would be best if you talked to your soon-to-be spouse about it and decided what to do. However, if you are at a point where debt collectors are calling you, or you are getting letters from addresses like PO Box 1280 Oaks PA, it may be time to seriously consider filing.
If you decide to file it before your marriage, choose Chapter 7. But if you’re going to file it after the wedding, go for a joint Chapter 13. In the end, it is always recommended to consult a professional attorney. Hire any expert lawyer and seek their advice. We hope this guide has helped you in making the right decision.