When you are struggling with debt, bankruptcy is one of the most powerful tools to get the relief you need and the opportunity to start rebuilding and strengthening your finances. It can completely liquidate your unsecured debts, like the thousands of dollars in credit card and medical bills that you have accumulated, or it can restructure your debt so that you are paying what you can afford.
When you live with someone, you are likely sharing your expenses, and that typically means that you are both struggling with debt equally. You may have opened some accounts in your name, and you may have opened some other accounts in your partner’s name. You may have become delinquent on accounts in both names, and you may be struggling to pay equally.
Unfortunately, if you are not married, you will not be able to file for bankruptcy jointly. Though you may have lived together for years, may share expenses and may have incurred debts together, and may share your lives together in every way that a married couple does, the law does not recognize your rights as a couple unless you are legally married.
Still, that doesn’t mean that you can’t use bankruptcy as a tool for debt relief. You just need to talk to a Gilbert bankruptcy attorney about what strategies you can use to get the maximum debt relief.
Chapter 7 Bankruptcy
If you and your partner have a lot of unsecured debt, such as huge credit card balances, high medical bills, or big personal loans, filing for Chapter 7 bankruptcy may be your best choice. You will either need to decide which partner has the most debt in their name and should file for bankruptcy, or you should decide that both of you should file for Chapter 7.
You must meet a means test to qualify for Chapter 7 bankruptcy. The test looks at how much money you make in context of certain factors, such as where you live and whether you are married or single. Though you will not get the same “credit” for expenses for being married, you will have to report your household income, which will include your partner’s income.
Work with a bankruptcy attorney to look closely at your finances to determine how filing individually or both of you filing at the same time can benefit you the most.
Chapter 13 Bankruptcy
If your additional household income disqualifies you from filing for Chapter 7 bankruptcy, you might want to consider filing for Chapter 13 bankruptcy. The requirements are a bit more relaxed with Chapter 13 because you don’t get the liquidation that Chapter 7 offers. Instead, your debt is restructured into a more manageable payment plan based on what the court deems you can afford.
Again, you can apply for Chapter 13 on your own, or you may decide that you will get more benefit if both you and your partner apply (separately, of course). Talk with your bankruptcy attorney to get a better understanding of how your monthly finances will look if you or both you and your partner are on a debt restructuring plan under a Chapter 13 filing.
Just because you cannot file for bankruptcy together if you are an unmarried couple does not mean that you cannot take advantage of the many benefits that bankruptcy offers. You’ll just need to think of a different strategy to get the maximum debt relief you can, and your bankruptcy lawyer will help you decide what the best strategy is.
Gilbert Bankruptcy Lawyers helps both individual and business clients get debt relief through bankruptcy. We work with married and unmarried clients, and we can help you find the right strategy even with the most complex of financial scenarios. We’ll help you decide whether to file for bankruptcy as an individual or whether you should both file separately as a couple. The goal is to help you take control of your finances by getting the relief the law offers. Contact our bankruptcy law office to learn more about your rights and options under the law. Our compassionate and dedicated bankruptcy attorneys are ready to help you through every step of the process.