How Filing For Bankruptcy Can Affect The People Around You.
Filing for bankruptcy is a huge decision, one that can affect almost every aspect of your life. While it can be relieving to have some of your debts forgiven, it can also be exhausting watching many of your assets get liquidated. This is why it’s crucial to think about all the possible changes bankruptcy can have on your life. Before you file for bankruptcy, here are the things to consider about how that decision can affect the people in your life you care about most.
When you get married, not only are your lives intertwined, but so are your finances. When you are filing for bankruptcy, it is important to consider how it may affect your spouse. If you two decide to file separately, your spouse’s credit history and score shouldn’t be impacted, short or long term.
However, your spouse’s items may not be saved from liquidation, which is something to consider. Also, if you alone file for bankruptcy, your spouse’s debts will not be forgiven, just yours. If your spouse is also facing a large amount of debt, it may be beneficial to co-file for bankruptcy.
If you and your spouse are discussing getting a divorce, filing for bankruptcy together might help your divorce proceedings operate more smoothly. If you and your spouse think divorce is right for you, co-filing for bankruptcy can help excuse some of your joint debt. It is something that will save you and your, soon to be ex, spouse a lot of money because filing with another person is most cost-effective than each filing on your own.
It’s recommended that you file before your divorce, as it can become much harder to go through the divorce process if it overlaps with your bankruptcy. If you file for bankruptcy during your divorce hearings, it will become hard to divide your assets as an “automatic stay” will be placed on your possessions. An automatic stay makes it temporarily illegal for creditors to reach out to you to pursue the debts you owe, but it also freezes your assets. With frozen assets, your divorce will end up being longer and more expensive.
If you have previously been divorced and are now filing for bankruptcy to relieve your debts, there are some debts that do not count. Even with a bankruptcy filing, a debt that you cannot avoid is spousal support. There are very few cases in which you can have this forgiven. Even after filing for bankruptcy, you will still owe your spousal support or child support.
If you have children, you probably always strive to do right by them. Bankruptcy can already take a toll on your mental health, and to be aware of how it can affect your children can help prepare you for what is ahead. Because, unfortunately, during the bankruptcy process, their lives may also be interrupted. When filing for bankruptcy, all non-exempt items are eligible for liquidation. This can mean any toys, furniture, electronics, and other non-essential items.
Luckily some items cannot be taken from your children. You are not required to liquidate any trust you have for them. Also, if your child has their own bank account, that is considered there’s, which means it won’t be affected during your bankruptcy. Even if you are on the account, your child’s own money is safe. Don’t think of it as a safe zone; you cannot transfer money there for safekeeping during bankruptcy. If you are caught doing that, it is considered fraud, and you will have to transfer the funds back to your accounts.
If your business is facing bankruptcy, it can seem like a scary last-ditch effort. If you find it best to file for bankruptcy before you shut the doors to your business, it may actually be beneficial. You and your partners most likely won’t have to pay off all the debt yourselves, thus leaving you, hopefully, not in total financial ruin.
If you are struggling with debt and need to file for bankruptcy Wagner Law Office, P.C. at (303) 536-5124! We are a team of experienced attorneys ready to help you navigate the uncertainty ahead with ease.