Your debt has reached the point where you’ve determined that bankruptcy is the best way to reset your financial situation and get a fresh start. You’re also planning to get married soon.
You may be embarrassed to tell your soon-to-be-spouse about your plans and even considering keeping it from them. However, filing for bankruptcy before marriage will impact your marital financial goals. It’s never a good idea to hide financial problems from the person you’re marrying -– certainly not bankruptcy.
How will your bankruptcy impact your spouse once you’re married?
Your spouse won’t be responsible for the debt you’ve accumulated before marriage, and your premarital debt won’t impact their credit rating. However, the bankruptcy will be on your credit report for a time (seven years for Chapter 13 and 10 for Chapter 7.) That means if the two of you try to get a mortgage, the bankruptcy on your record could prevent it — or at least impact the interest rate you’ll pay.
Further, if you file for Chapter 13, you’ll have a repayment plan of up to five years. Even if your spouse’s money isn’t used to pay your debts, they need to know about it. If you pay off the debts in part using marital assets or your spouse’s separate assets, you’ve commingled funds. It’s important for both of you to understand the potential ramifications of that should you later divorce.
When should you consider filing after you’re married?
What if you’ve discussed your impending bankruptcy with your partner and you’re contemplating waiting until after you’re married to file? That’s typically recommended only if your spouse-to-be is also considering bankruptcy. You could save legal and filing fees by filing jointly
If that’s not the case, however, you’re going to impact your spouse’s financial future more if you file for bankruptcy on your own after you’re married instead of before. Further, since both of your incomes will be considered, you may not be able to qualify for Chapter 13 and not have the option of Chapter 7.
In addition to discussing your situation with your spouse-to-be, it’s wise to discuss it with an experienced bankruptcy attorney. They can tell you more about the process and review your options with you.