Do you want to get married? While this is an exciting time for couples, it also brings new financial questions and concerns. For those who struggle with debts — either one or both partners — one important question to address is whether to delay the wedding in order to file bankruptcy first. To help you find the right timing and solutions, here are five of the most important factors to consider.
1. Whether Both Need to File. Just because your partner files bankruptcy doesn't automatically mean you must do so as well. Either single or married, one partner can file without the other. However, if you do both need to file bankruptcy, you may save money and time by waiting to file as a joint case.
2. How Wedding Assets are Affected. Have you saved up money for the wedding? If so, these assets may be at risk if you file bankruptcy before using them for their intended purpose. And no couple should attempt to hide wedding savings from a bankruptcy court by transferring them to the unaffected partner. This is bankruptcy fraud, and it can carry negative consequences.
3. The Size of the Wedding. Go over your wedding plans with a bankruptcy attorney to determine how they may be viewed by a court. If you put a lot of wedding charges on credit cards and then declare bankruptcy on these right afterward, you might accidentally commit bankruptcy fraud. In addition, large unnecessary cash expenditures could make a trustee think you're draining assets to avoid repayment.
4. Your Personal Relationship. How do your or your partner's debts affect your relationship? Bankruptcy is primarily a financial decision, but don't underestimate the emotional and personal impact of debt and debt relief. Wedding planning is stressful on its own, but you might benefit from either delaying the work of filing bankruptcy or getting it out of the way before moving forward.
5. How You'll Share Assets. What are your and your partner's plans for sharing household finances after the wedding? Comingling assets — sharing accounts or debts — could open up one person's assets to help pay the other person's bankruptcy case. You can protect even a married partner's assets, but you'll have to take proactive steps from the beginning. Getting rid of debts while single may be the safest option.
Need help determining how each of these factors affects the timing of your or your fiancé's bankruptcy? Start by meeting with an experienced bankruptcy lawyer in your state today.
For more information on bankruptcy law, contact a professional near you.