Chapter 7 Bankruptcy in Chicago- How It Effects Marriage

 Filing for chapter 7 bankruptcycan become especially confusing when there is another person involved. Many married couples who are struggling financially will try and file for bankruptcy under just one of their names. The do this because of a false assumption that it is better to keep the credit intact of one of them so they can continue to borrow money and use credit cards.

The problem with this idea is that when debt is created by two people and one of them files for bankruptcy, the non-filing partner will still be responsible for their share of the debt. This can create a challenging dynamic between spouses.

In many cases it is more adventageous to file jointly and get a fresh start. It prevents a strain on the personal relationship and credit can be rebuilt in a much shorter time than expected.

The only time one spouse would be unaffected by a bankruptcy filing is if it were to happen before the couple married. The debt accrued before marriage belongs to the individuals so if finances are strained it is better to file before joining into a marriage. Once two people become husband and wife they still own their own debt but any debt created thereafter would be the responsibility of both people.

When bankruptcy is filed by a married individual the finances of both spouses will be reviewed. In fact in order to qualify for chapter 7 bankruptcy the court will look at the household income of the individual filing, not just their own income.

Should a  couple divorce and then one of them file for bankruptcy the court may still review the finances of the ex-spouse. They will need to determine what part of the debt is their responsibility. If the assets have been divided the court will look at any existing joint debt. They will decide of the ex-spouse is laible for any of it otherwise it will be included in the bankruptcy filing.

Whatever stage your marriage is in, if you are considering bankruptcy consult a qualified attorney. They will help you decide the best way to file under your personal circumstances.

Chang and Carlin
The content found on the Chang & Carlin site is not legal advice and is purely for informational purposes. The information contained herein is not a substitute for the advice of an attorney and does not create an attorney-client relationship. If you are interested in obtaining information about chapter 7 bankruptcy, chapter 13 bankruptcy, foreclosure services, real estate legal services, you are encouraged to call our law firm at 866-790-8601 or Request a Free Legal Evaluation. Chang and Carlin serves clients in Chicago, Schaumburg, Joliet, Warrenville, Waukegan, Illinois.