Getting married is about making a commitment – for better or for worse, in sickness and in health, for richer and for poorer. So, what happens to a married couple when one or both parties is struggling with debt, and wants to file for bankruptcy?
Would it surprise you to learn that financial issues are among the biggest things that couples regularly fight about – and which may, in some cases, even lead to separation? Reports have indicated that money management and the idea of saving vs. spending both routinely come up when couples argue.
This is hardly surprising, right? After all, it can be difficult to talk about money even under the best of circumstances. When your financial outlook is looking a little less than rosy? That’s a different matter entirely. And, what’s more, it can be particularly difficult for couples to talk about debt; this is a tough topic to breach among families, especially since it may ultimately affect your home, your lifestyle, and your shared future.
As a married couple, it’s important to understand all of your options when it comes to debt relief, including bankruptcy. There are several different bankruptcy options out there for married couples seeking lasting debt relief, and finding the right solution for your family’s unique needs may come down to a few different factors, including the amount and type of property you own, how many of your assets are owned jointly, and how state and local laws govern exemptions in your area.
Broadly speaking, it’s important to remember that married couples can file for bankruptcy jointly, and as individuals. There are advantages and disadvantages to both courses of action – and, again, finding the most effective solution for your unique needs is going to require thinking about the specifics of your personal situation.
Here are a few important things to keep in mind as you weigh your options for filing for bankruptcy as part of a married couple:
Individuals can still file for bankruptcy by themselves, even when they’re married. With that said, however, there are going to be circumstances where this is a logical course of action, and where it may be better to explore filing jointly. Couples may want to look into filing individually if:
- Most or all of the debt belongs to just one part of the couple
- The couple does not jointly own much valuable property
- The couple wants to protect one party’s credit score and financial standing (i.e., if you’re interested in buying a house in the next few years, for example)
- One partner is not able to file for bankruptcy (for instance, if they are still in the waiting period following a previous bankruptcy discharge)
- Spouses are separated or separating, and cannot agree on a course of action working together
Married spouses can file for bankruptcy jointly in Illinois. Often, this arrangement can offer a couple some notable personal and financial advantages – although, again, it’s important to keep in mind that everyone’s personal situation and results will be different.
For instance? If both parties are dealing with debts, filing jointly can be a way to save significantly on fees, including filing fees and legal rates, while also saving time and consolidating paperwork.
At the same time, the state of Illinois offers some incentives for couples filing jointly. Most importantly? When it comes to exemptions, spouses who file together in Illinois can typically each claim the full amount of a given exemption, as long as they both have an ownership interest in the relevant property. This is often called “doubling” exemptions, and it can allow families to hold onto more assets overall. Similarly, if a married couple owns property with joint tenancy in the entirety, they may be able to protect equity in their home, above and beyond what the Illinois Homestead Exemption automatically allows.
Filing jointly may be the right fit for spouses if:
- You want to share a petition (which may be more convenient, and allow couples to share court dates, complete paperwork together, limit attorneys’ fees, and have the same date of discharge)
- Most of your valuable property and/or debts are owned jointly, or were incurred during marriage
- You want to explore the potential for doubling your exemptions
- Both parties need protection from creditors
Bankruptcy for Married Couples: Finding the Solution for Your Unique Needs
Now, with all this being said, it’s important to keep in mind that there are still going to be other considerations for married spouses considering bankruptcy for debt relief.
For instance, whether filing jointly or individually, you may need to make the choice between pursuing Chapter 7 or Chapter 13 bankruptcy, which each allow filers to discharge or restructure their debts in different ways, and along different timelines. This decision may also be impacted by your results during the bankruptcy means test, the completion of which is required in order to attempt Chapter 7.
At the same time, regardless of whether you ultimately file using Chapter 7 or Chapter 13, it’s essential to note that pursuing bankruptcy is going to mean taking into account your income, examining your assets, and working with your creditors. It’s also crucial to remember that bankruptcy may have some long-term effects, including impacting your credit score and determining when you may be able to purchase real estate.
The most important thing to remember? Whether filing singly or jointly, you don’t have to go through the complex bankruptcy process alone. Bankruptcy can offer an unparalleled opportunity to hit refresh on your financial life – and working with an experienced bankruptcy attorney in your area can make all the difference, allowing you to get a handle on your unique circumstances, weigh your options, understand the variables at play, and, ultimately, make the decisions that will work best for you and yours.
Have Any More Questions About Bankruptcy In Chicago?
Are you considering bankruptcy and live in the Chicagoland area? Is debt beginning to impact your ability to enjoy life? Are you and a spouse looking for financial relief? If you have any more questions about bankruptcy and debt, don’t hesitate to get in touch with the Gunderson Law Firm to keep the conversation going.
At the Gunderson Law Firm, our attorneys and staff are experienced in all of the ins and outs of bankruptcy law, and can help answer your most pressing questions and find solutions tailored to your unique situation. No need to search through every variable and hope you find the answer you’re looking for; just get in touch, and we can help get the process started, including exploring potential bankruptcy alternatives and counseling solutions that may work for your needs.
Whether you are a business owner, a wage earner, retired, or otherwise, we can address your specific situation with strategic plans to help put severe indebtedness behind you so you can enjoy life again. Don’t hesitate to drop us a line or give us a call to set up your free initial consultation.