First comes bankruptcy, then comes marriage. When in a relationship with a person you love and considering the next step, finances and financial goals are often discussion topics that are last on everyone’s list.
Know Before you Jump into Marriage
When a couple is taking their relationship to the next level, often the only conversation about money is who is picking up the tab at dinner. Everyone’s finances seem to be a sensitive topic and too “personal” to discuss. This is absolutely wrong. When a couple is considering marriage, finances are one of the most important topics for discussion. If you are intimate enough to discuss spending the rest of your lives together, personal debt and spending is not too personal to discuss and the discussion may be vital to the relationship working out. How are you supposed to know if you can share a life together if you don’t know if you can share a bank account?
Discussions about income, spending habits, and debt are very important to a couple to make sure that they are both on the same page. What are your relationship goals individually and as a couple? If one partner wants to buy a house in the next two years and the other partner has bank accounts that are being garnished by credit card companies and a car repossession, then the couple’s finances are not going in the same direction. Not only that, but if the partner with the debt issues is added to the down payment savings account without properly discussing debt, then the couple could wake up one morning to find the balance of their dream home fund dramatically reduced by a garnishment.
Why Bankruptcy First?
Marriage creates a new entity. Two partners become one. A husband and wife (or other gender coupling as applicable) join finances, responsibilities, and futures to become a household. For bankruptcy purposes, this household shares income and the responsibility for debt payment even if only one of the spouses is filing bankruptcy. The bankruptcy court views the couple as a household that shares everything even if the couple has an agreement to keep everything separate.
The partner in the relationship who is bringing the debt challenges and stress that may follow him or her into the new marriage may want to seek a fresh start in bankruptcy. A bankruptcy may assist in assuring a new spouse that the there is a clean slate in front of them as a couple and provide a solution to any debt issues that may threaten their future goals.
Until the partner in debt gets his or her finances under control, it may be a good idea to not join together in new debts or link finances. The more commingled a couple’s assets, finances, and debts become, the more likely the debt free partner will be affected by the other partner’s debt.
How to start the conversation?
A good idea may be to schedule a fun dinner at home or a casual place. The point is to create a safe zone where everyone will feel comfortable and more relaxed. Each partner should bring a copy of his or her credit report and a list of bank accounts with the balances. The discussion should address income, expenses, debt, assets, and how to overcome the financial obstacles to financial goals.
If you are in a relationship and want to know how your partner’s debts will affect your future together and want to know more about bankruptcy as a solution, please contact me, bankruptcy attorney Kelly Roberts, for a free consultation (786) 659-4422.