How to Discuss Bankruptcy with Your Spouse
One feature of the bankruptcy code is that married consumers can file for bankruptcy with their spouse. Of course, not everyone should file with their spouse. And even if you choose to file as an individual, your bankruptcy will affect your spouse and your future together.
All of this is to say that married consumers contemplating bankruptcy need to discuss the issue with their spouses. Although many people are afraid of talking finances with their husband or wife, there is no reason to delay. Here are our three tips for making the conversation as productive as possible.
Be Honest About Your Debts
There’s no way to sugarcoat the bad news: you are in debt and you need help. Many people enter their marriages with massive credit card bills, which they managed to keep secret from their significant other. Now is the time to put all your cards out on the table.
For one thing, use accurate numbers. Don’t say, “I owe around $30,000.” Instead say, “My current balance is $32,516 and my minimum monthly payment is $611.” Being accurate gives your spouse a full appreciation for the scope of your financial situation. It also can help build trust by showing that you will be fully honest about your debts from now on.
Also be honest about your income. Some married couples don’t really know how much their spouse makes, especially if they have yet to file a tax return together. Then discuss how you cannot make your debt payments on your current income.
Discuss How a Bankruptcy Will Affect Your Future
A bankruptcy—even an individual bankruptcy—will affect your spouse. For example, if you file for bankruptcy and hope to buy a home together, the bank will probably not lend to you so long as your name is on the mortgage. This means your spouse will need to take out the mortgage on their own and the bank will only consider your spouse’s income.
However, there are also positive aspects you should highlight as well. By wiping out certain debts like credit card debts, you can save more money each month. You might be able to save up enough for a down payment on a home, which you can buy when the bankruptcy falls off your credit report.
Focus on the Future
A bankruptcy can set you back—but only temporarily. Understand how to rebuild credit after a bankruptcy and talk with your spouse about the steps you will take. If you temporarily are without work, discuss how you intend to increase your earning potential in the next few years, which can reduce the financial strain on you as a couple.
Need Financial Help? Reach Out to a Bankruptcy Attorney in South Florida
At Nowack & Olson, our team of bankruptcy lawyers is here for you. We are happy to discuss your different options, including which consumer bankruptcy best fits your circumstances. To schedule a free, no-strings consultation, please call 866-907-2970 today.