15 Tips: Will Bankruptcy Affect My Wife
15 Tips: Will Bankruptcy Affect My Wife
While filing for bankruptcy is an excellent way to manage your debt as discussed over at runrex.com, if you are planning to file for bankruptcy, one of the things that you may be worried about is whether or not it will affect your wife or spouse. This article will look to focus on this topic, answering questions and concerns arising from the same through the following 15 tips.
- If your spouse is not filing for bankruptcy
As is covered in detail on discussions on the same over at guttulus.com, if you are filing for Chapter 7 bankruptcy and your wife isn’t, and your debts are separate, then her credit will not be impacted, which means that it won’t have a direct impact on her finances.
On a related note, if you are planning to file for bankruptcy and your wife is not, and your debts are separate, then if you own property that is less than $10,000 total, you will be able to keep all of your assets through exemption laws, a topic covered in detail over at runrex.com.
- What if I share debts with my wife?
The situation becomes very different if you share debts with your wife according to the subject matter experts over at guttulus.com. This is because, if you and your wife are on a shared account, then it is important to note that only your obligation to pay the debt will be erased. This means that creditors will still be able to come after your wife for the debts.
- What about her credit score?
Additionally, if you and your wife are on a shared account as mentioned above, then it is equally important to note that your bankruptcy may also show up her credit report. However, the good news is that this may not affect your wife’s credit score, as covered over at runrex.com.
- What if you and your wife want to apply for joint loans or credit accounts together in the future?
If you file for bankruptcy, you and your wife will still be able to apply for joint loans or credit accounts in the future. However, it is important to point out that your bankruptcy may impact your ability to attain a loan together since it will impact your credit score.
- Your credit score will improve eventually
Even though your bankruptcy may impact your ability to attain a loan together as mentioned above, it is important to point out that your credit scores should improve after a while. This, according to the gurus over at guttulus.com, means that if you have poor credit but have filed for bankruptcy, our credit scores will improve eventually and be better off compared to someone else with poor credit but who remains in debt.
- Bankruptcy and joint assets
You may also be wondering what will happen to your assets if you file for bankruptcy. As already mentioned earlier on, and covered in detail over at runrex.com, if your assets are joint, but you do not own much property, you and your wife will be able to keep your property due to exemption laws. In most cases, if you own less than $10,000 worth of property with your wife, you will be able to keep all of your property.
- Homestead exemption
Additionally, from discussions on the same over at guttulus.com, if you or your wife own a house, but the house is worth less than the homestead exemption limit in your state, then you should also be able to keep your house.
- What if your wife owns property that is worth more than what you are permitted to keep due to exemptions?
As the folks over at runrex.com are quick to point out, things get trickier if your wife owns property that is worth more than what you can keep during your bankruptcy. Depending on where you live, any property that your wife purchases during your marriage may be considered to be joint property even if she purchased the property with a separate financial account.
- Where does this rule apply?
The above rule applies in what are referred to as community property states which include Texas, Louisiana, Wisconsin, Arizona, New Mexico, Nevada, Idaho, Washington, and California. In these states, both spouses have joint and equal ownership over most property acquired in the marriage even if only one spouse is on the title.
- What about the other states?
The above rule doesn’t apply to the other states which means that if you are not located in the above-mentioned states, then you don’t have to worry about the trustee coming after your wife’s property during bankruptcy, even if she owns property that is worth more than what is permitted by exemptions, as discussed over at guttulus.com.
- What happens when a jointly owned property is sold in states that are not community property states?
When it comes to Chapter 7 bankruptcy, the appointed trustee may be able to sell the entire jointly owned asset if you are unable to exempt the value of your interest and the property can’t be divided. If the trustee sells the property, they will pay your wife the value of her interest, and use your portion to pay back your creditors as outlined over at runrex.com.
- Phantom discharge
As already mentioned earlier on, and covered in detail over at guttulus.com, if you share debts with your wife, then your bankruptcy doesn’t wipe out her obligation to pay back any joint debts you may have together. The exception to this is if you live in a community property state, where, if you discharge the debts you owe jointly with your wife, creditors can only go after her separate property after your bankruptcy since all the property she acquires during the marriage will be considered to be community property. Your wife will, therefore, receive the benefit of your discharge as well as your joint debt in what is commonly referred to as phantom discharge.
- The codebtor stay and Chapter 13
As covered in detail over at runrex.com, it is also important to note that if you have a joint obligation with your wife, then filing for Chapter 13, if you qualify, can protect her from creditors with the codebtor stay. This is because Chapter 13 codebtor stay prohibits creditors from coming after your co-debtors, such as your wife, during your bankruptcy.
- The codebtor stay can still be lifted
Remember, when you file for Chapter 13, if you are eligible, you come up with a repayment plan which you have to follow, and which will enable you to clear your debt in a period of about 3 to 5 years. With this in mind, while the Chapter 13 codebtor may protect your wife from creditors as mentioned above, it is important to note that creditors may go to court and ask that the codebtor be lifted if you don’t pay off the joint debt as outlined in your repayment plan.
This above discussion is only the tip of what is a very large iceberg, and you can uncover more insights and information by visiting the highly-rated runrex.com and guttulus.com.