As a Memphis TN bankruptcy attorney for over 30 years, I know debt can weigh heavily on a marriage. Unfortunately, with seven out of ten Americans getting married with some amount of debt, it’s not an uncommon problem. Luckily, if you, your spouse, or both of you are struggling with debt, bankruptcy can be the solution. It can provide you and your marriage the clean financial slate — and stress relief — you both deserve.
That being said, I realize bankruptcy comes with a lot of myths and misinformation. I’ve met many married individuals who could greatly benefit from the fresh start bankruptcy offers, but are worried about how filing might affect their spouse.
Below, I’ve answered the most common questions for married couples considering bankruptcy.
Will bankruptcy affect both of our credit scores?
If you and your spouse keep your finances separate, it’s possible that only one person’s credit score will be affected. In fact, there are laws against one spouse’s bad credit score automatically affecting the other. However, if you have debts or joint accounts that you’re both liable for, bankruptcy will usually affect both of your credit scores. However, if you are considering filing for bankruptcy, your credit score is most likely not in a great place to begin with.
The good news is that filing for bankruptcy gives you options. You can get rid of your dischargeable debts through a Chapter 7 bankruptcy, or lump your debts into an affordable 3-5 year repayment plan with a Chapter 13. Then, once the bankruptcy is complete, your debt is wiped out. This provides you with a great opportunity to begin rebuilding your credit score back stronger than ever.
At my firm, we are proud to offer our clients a free course called “7 Steps to a 720.” This online course teaches you tips and tricks to rebuild your credit score to an A+ rating after a bankruptcy.
Do both spouses need to file for bankruptcy?
No, it is not required to file a joint bankruptcy. If one spouse has a significant amount of debt in his or her name only, filing separately might make the most sense for you and your family. But if you have assets that you want to keep under both of your names, or dischargeable debts for which you are both liable, you will want to file together.
Do I need my spouse’s permission to file for bankruptcy?
You will only need your spouse’s permission to file if you have joint accounts, assets, or debt. But since most married couples have at least some tied finances, many choose to file jointly out of necessity. In this case, your spouse will have to be an informed, willing participant.
Whatever your situation is, I highly suggest discussing bankruptcy with your spouse before you file. Though discussing debt is never easy, especially with the ones you love, considering bankruptcy is nothing to be ashamed of. In reality, bankruptcy is a tool that exists to help you with your financial situation. If used properly, it can provide you and your partner with a brighter, more stable financial future.
Contact a Memphis TN bankruptcy attorney to discuss your options for FREE.
Each couple considering bankruptcy is unique. Give us a call at (901) 327-2100 or contact us online for a FREE, no-strings-attached consultation. One of our experienced and compassionate attorneys will answer any questions you have. We’ll also discuss how bankruptcy may affect your spouse, and help find a solution that works for both of you.
Give us a call today and hear how we can help you finally get you on the path to financial freedom.