Engaged Couples Should Have A Serious Conversation About Debt
You have probably heard all the stereotypes about the things that enjoy unprecedented popularity among millennials, for reasons that their elders do not understand. Millennials love avocado toast. Millennials love Instagram. Millennials love prenuptial agreements. People born after 1980 have a lower rate of marriage than previous generations, but the ones that do marry are more likely to sign prenuptial agreements. Why would a generation with a lower rate of home ownership, and fewer assets in general, be so keen on prenups? The answer is debt. People born in the 1980s are very likely to carry heavy burdens of student debt, in addition to the medical debt that plagues almost all age groups. A Plantation bankruptcy and divorce lawyer can help engaged couples, already married couples, and recently divorced people make strategic decisions about filing for bankruptcy.
Is Filing for Bankruptcy Before Marriage the New Filing for Bankruptcy After Divorce?
A high percentage of bankruptcy filings are from people whose divorces have recently become final. There are several reasons for this; first, divorce is rough on almost everyone’s finances. Plenty of people who were doing fine with making payments on their debts while they were married begin to struggle when they suddenly have to pay for divorce lawyers, a new separate residence, alimony, and child support. Second, it is a way to make a fresh start. If the debts piled up throughout your marriage, and the divorce court assigned more of them to you than you can pay, filing for bankruptcy can make some of them disappear.
In some cases, though, it also makes sense to file for bankruptcy before you get married. If you discharge most of your debts in bankruptcy before you get married, you will not have to worry about them becoming marital debts. It makes sense to do this if your fiancé has much better credit than you do.
How to Protect Your Finance from Your Debt
Filing for bankruptcy is one way to protect your future spouse from being pursued by creditors for repayment of your premarital debts. It doesn’t work in all situations, though, such as if you already filed for bankruptcy a short time ago and are now struggling with debt again. Bankruptcy also doesn’t discharge all debts; it can’t help with tax debts or child support obligations, however. A prenuptial agreement that specifies that your premarital debt will not become your spouse’s responsibility could be the best solution. If child support obligations are the main source of your financial struggles, you should go back to court to try to modify your child support order.
Start Your Marriage Off Right by Being Honest About Your Debt
A divorce and bankruptcy attorney can help you and your future spouse prevent divorce by creating an actionable debt repayment strategy before you say “I do;” this may or may not involve filing for bankruptcy. Contact Nowack & Olson, PLLC for a consultation.