Bankruptcy Xml

Money problems in marriage are stressful for any couple. In fact, money trouble is the number one cited reason for divorce in the country today. With so much at stake, it is a wonder how any couple makes it through. Luckily, filing for bankruptcy can provide some much needed financial relief for a couple. However, there are some things to consider about how to best proceed with a bankruptcy both in marriage and after a divorce.

In Marriage

Filing for bankruptcy in marriage posses some mild challenges that can be easily managed if handled correctly. There are two ways to file for bankruptcy in marriage.

The first is filing as an individual, separately from your spouse. This means that you are filing for bankruptcy protection and debt resolution without your spouse. Essentially you are agreeing to take sole liability for the debts when you file separately. This is usually the best option when one spouse owns the bulk of the debt burden, shares very few accounts with the spouse or needs resolution on debts that were accumulated prior to marriage. However, it is important to remember that even though you are filing separately, there may be some concern over shared assets. In other words, creditors may have the right to pursue payment from the non-filing spouse and seize certain shared assets.

The second way to file in marriage is together, or jointly. Filing as a couple means that you both are claiming responsibility over the debts and both requesting protection over assets. While filing jointly may offer better asset protection, it isn't for everyone. Typically, you would only file together as a couple if the bulk of the debts are held on shared accounts, or accounts that list you both as liable; or your shared assets are at risk from creditors.

After Divorce

Filing for bankruptcy after a divorce poses unique challenges to both the filing and non-filing spouse. The biggest cause for concern when filing separately after a divorce is how debts will be handled. Although you may be able to secure a debt discharge, the non-filing spouse may still be held liable by the creditor. This is especially the case for jointly held debts, or those accumulated together in marriage on a shared account. The trouble here is that if the non-filing spouse is unaware of your filing, or does not file themselves, they could be held solely responsible for repaying the debts.

Another issue concerns divided assets. Any assets that were divided in the divorce property may still be at risk from creditors in a filing. If the non-filing spouse retained possession on a specific asset that is tied to a debt in the bankruptcy case, the asset could be repossessed by creditors. The best way to manage debts in divorce is to specifically outline debt liability in the divorce decree along with asset possession, in order to avoid confusion during a bankruptcy case.

Christopher M, of Lee Law Firm, understands that financial hardships can affect honest, hard-working people. His early experience growing up in a very blue collar family in a rural area of Indiana, made a significant impression on his business philosophy today. As a child, he watched his family struggle as money didn't come easy and his parent work hard to provide for their family. As a bankruptcy attorney in Dallas, TX his practice has given him the opportunity to directly impact the lives of many people.

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