How To Go Through Bankruptcy Together as A Couple in Dublin, Ohio
How To Go Through Bankruptcy Together as A Couple in Dublin, Ohio
In today's world, it is common for people to get married later in life, or to perhaps decide to simply live together for many years prior to getting married. In either case, each person brings a certain amount of financial debt to the relationship. Should one person have a large amount of debt, they may consider filing for personal bankruptcy. Even if a couple is not married, here is how going through bankruptcy together will impact a couple in Ohio.
Merging Their Debt
Once a couple marries, much of their debt will be merged, meaning it will be the responsibility of each person. However, it is crucial to remember that debts which are incurred by each person prior to the marriage will remain theirs specifically. Examples of this include credit card debt and student loan debt, both of which can quickly accumulate to very high amounts. After a couple marries, common types of debt they may incur together include a home mortgage or auto loan, other loans that were cosigned, and debt that is charged to a joint account, such as a credit card.
Chapter 7 or Chapter 13?
When a married couple considers bankruptcy, they should keep in mind that they can file either individually or jointly. Generally, it depends on the types of debt and the couple's financial situation. Filing can be done either under Chapter 7 or Chapter 13 bankruptcy, with most couples selecting Chapter 7. Under Chapter 7, a couple's assets will be liquidated. To qualify, they must pass a means test to show their income is below a certain threshold. Should Chapter 13 be used, the repayment plan will be 3-5 years, and the couple's credit score will take a significant hit.
Exemptions for Couples
In Ohio, certain assets are exempted, meaning they will be protected during bankruptcy proceedings. Applicable to both Chapter 7 and Chapter 13, assets such as real estate, certain household items, and cars are protected. If a couple files jointly, exemptions are doubled, meaning more of the couple's property can be maintained.
Personal Bankruptcy
If one partner files for personal bankruptcy, the other person's assets are usually protected. However, any property that was acquired during the relationship is subject to being divided. Also, one person filing for individual bankruptcy usually does not affect the credit score of the other partner.
The Stress of Bankruptcy
Finally, couples facing bankruptcy deal with large amounts of stress. Anger and resentment are very common emotions to have during the process since major lifestyle adjustments are often necessary due to financial constraints. To ensure their relationship survives bankruptcy, couples should have realistic expectations, plenty of open and honest conversations amongst themselves, and always keep their lines of communication open.
Since any bankruptcy case can be complex and confusing, it is always best for couples to work closely with an experienced Ohio bankruptcy attorney. By doing so, they can have their questions answered, gain peace of mind, and find themselves back on the road to financial freedom.