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by Jesse Campbell on May 16, 2016

Marriage and Bankruptcy 

The following is not intended as legal advice. For legal advice, including advice related to bankruptcy, please consult with a licensed attorney.

Ask the Experts: Bankruptcy before or after the wedding?

I am getting married soon, but I also need to file for bankruptcy. Would it be wise to file before we are married or wait till after? She has okay credit and I don't want it to affect her credit. –Chad

Hi Chad –

Filing for bankruptcy is a difficult and complicated process. If that’s a path you want to pursue, your best first step is to speak with a qualified attorney. They’ll be able to most accurately walk you through the unique consequences for your circumstances.

Speaking generally, however, there are a few things we do know about bankruptcy that you can consider before you begin that conversation with your attorney.

You can always file as an individual

Regardless of whether or not you’re married, you will always maintain the option of filing separately as an individual. So simply because you’re married does not mean your new wife will have to participate in the bankruptcy.

When you file as an individual, your spouse, their debts, and their assets are not included in the bankruptcy. If you have joint accounts, they may be discharged as part of the bankruptcy, which would most likely have an impact on your spouse’s credit. If you’re married and choose to file for bankruptcy as an individual, it’s important that you understand which accounts are solely yours, which are solely your spouse’s, and what will happen to any joint accounts you may have.

Chapter 7 vs. Chapter 13

You may have the option to file for Chapter 7 bankruptcy or Chapter 13 bankruptcy.

Chapter 13 is the most common and is often referred to as a wage-earner plan. In a Chapter 13 bankruptcy, you are assigned a repayment plan based on your available disposable income. You get to keep all of your property and assets as long as you continue to make the assigned payments for the required amount of time, usually 3-5 years.

Chapter 7 bankruptcy, on the other hand, is a liquidation of debts. Here your non-exempt assets and property are sold with the proceeds being used to repay your creditors. If you have any joint property with your spouse, that property could be included, however, that depends on the laws of the state where you file.

The aftermath

So, if you file for Chapter 13 bankruptcy, your credit will take a major hit (a Chapter 13 bankruptcy will stay on your credit report for 7 years) and you will have an ongoing debt repayment bill for the next 3-5 years.

If you file for Chapter 7 bankruptcy, your credit will also take a major hit (a Chapter 7 bankruptcy will stay on your credit report for 10 years) and all of your nonexempt assets (anything not considered a necessity) will be sold.

Now whether or not you want to go through that process before or after your marriage is up to you. Talk to your future spouse. Do you have any short-term or long-term goals that may be impacted by your decision? Is it better to start immediately, or are there any reasons why you would be better served waiting for a bit? Are there potentially other options that better fit your shared goals?

No matter which option you choose, filing for bankruptcy can be a lengthy, painful process. It’s a difficult thing to go through alone, so strive to keep the lines of communication open.

Good luck!

Posted in:  Family, Budgeting Advice


Anonymous says:
May 19, 2016

Good grief. This is ridiculously histrionic. I understand that your job is to discourage people from filing bankruptcy (although I'm not entirely sure why, as in many cases it can be the best thing to do), but stating that filers have to sell off "all of [their] nonexempt assets" is a load of crap. I've filed, and for the average person, you will need to sell PRECISELY NOTHING. If you're wealthy and have several homes, an airplane, expensive cars, priceless art, etc., yes, you'll likely need to sell some of that--but that's not even assured. Also, bankruptcy will IMPROVE your credit score in the long run. It will dip for a few months, and then gain 100+ points following that and keep going up as long as you've learned your lesson and use credit judiciously. Bankruptcy is not fun, but it's also not the death sentence you're making it out to be. This is an extremely unfair and guilt-inducing portrayal of the process. My opinion of MMI just dropped precipitously.

Jesse says:
May 24, 2016

Anonymous - I'm sorry to hear that this article came across as "guilt-inducing" to you. It's never our intention to dissuade anyone from selecting bankruptcy (we even offer bankruptcy education and counseling for people who have chosen that path). The hope with this article was to simply provide a general overview of the bankruptcy process. That said, everyone's experience with the process is unique. Anyone looking for a more in-depth understanding of what their unique process will look like should speak with a bankruptcy attorney. You are very correct, however - bankruptcy is not a death sentence. For many, many people it is absolutely the right choice and no one should ever feel bad for making that choice.

Lucy Metcalfe says:
August 22, 2016

Great post here! Filing for bankruptcy before and after the wedding has the same outcome. The most important thing here is that you will be open to your future partner about your financial problem because in the long run both of you will be affected financially. Filing for bankruptcy is a stressful process which needs full support from your loved ones.

Rn71 says:
May 27, 2016

Anonymous I'm not sure that you have ever filed bankruptcy. Wow. Your credit DOES NOT bounce right back. This article is spot on. I had to file 4 years ago due to business failure and it has been financially devastating. I had no choice at the time and I feel that it is something no one should enter into lightly. You do have to include ALL of your assets and it is up to the judge whether or not to sell them off. You are at their mercy.

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