Filing for bankruptcy is not one of the easiest decisions to make for an individual. Yes this can be anyone tougher decision to make for couples. When you’re married, you share your problems with your partner as well.
Today, we will discuss some of the most commonly asked questions by couples for bankruptcy, and the answers to those questions.
Whose Income is Consideredin The Means Test?
The mean income is your average income in the last six months. This is a very important point which is always considered to see whether you are in a financial position to repay the debts, or filing for bankruptcy is your only viable option.
In the case of chapter 7 bankruptcy, the court has to see whether you have enough assets to repay the debt after liquidation.
If your partner has to pay for child support and other essential items, that money can be subtracted from the mean income.
What Will Happen to My Spouse’s Credit Score?
If you have filed for bankruptcy on your own, your spouse’s credit score won’t be affected at all. However, if your spouse has cosigned on debt documents, their credit score might also get affected.
You can save your spouses credit score by filing for chapter 13 bankruptcy.
What About Automatic Stay?
When you and your spouse both file for chapter 13 bankruptcy, is the court issues an automatic stay to stop the creditors from repossessing or foreclosing your assets. In this type of bankruptcy, a 3 to 5 years long repayment plan is created, and no one can foreclose your assets. You can also learn more about automatic stays if you’re curious.
So, whatever you do when filing bankruptcy, do it after careful consideration and after sitting with your bankruptcy lawyer for a long time.
