Bankruptcy & Marriage: Frequently Asked Questions
Q. How will getting married affect our debt and credit?
A. When getting married you remain responsible for any debt incurred before saying “I do”. Responsibility for any debt incurred after your wedding day, however, depends on the laws of the State you live in, however. Some states are what is known as ‘community property states. Meaning both spouses are equally responsible for any debt that they incurred together while married. Colorado, however, is an “equitable distribution” or “common law” state. Meaning marital property isn’t automatically assumed to be owned by both parties and therefore should be divided equally upon divorce.
Q. Does it make more sense to file for bankruptcy before or after getting married?
A. The answer to this question is both yes and no. Just depending on you and your future spouse’s circumstances.
For example, it might be better to file for bankruptcy AFTER you get married if you and your soon-to-be spouse have a significant amount of debt coming into the marriage. Filing jointly would save you money on court and legal fees. Not to mention time in meetings with creditors and trustees.
However, If only one of the individuals entering the marriage has significant debt and the other one does not. Then it might be advisable to file for bankruptcy before marriage as you do not want your spouse’s income included in your means test. Or to damage their financial health unnecessarily
Q. Does filing for bankruptcy affect your spouse’s credit?
A. If you filed for Chapter 7 as an individual then it will remain on your credit report for 10 years, and for 7 years if you filed for Chapter 13. This will not directly affect your spouses credit report.
However, it could affect your financing options still if both of you and your spouse’s names are on a joint application for a loan such as a mortgage, or car loan.
As you can see the answer to these questions varies very much depending on each individual set of circumstances.
If you are considering marriage, bankruptcy, and/or a fresh financial start please feel free to fill out the form below or just give us a call at 720-515-9887. Our consultations are always free.
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