The North Carolina Bankruptcy Information Blog

Recent gains for marriage equality in states like Iowa and New Hampshire have been met by a lot of legal questions for those who are actually considering marriage with their gay and lesbian partner. Confusing differences in relationship recognition amongst state and federal laws can create true legal challenges for same-sex couples throughout the country. These legal hurdles for gay and lesbian spouses include barriers when these couples seek the benefits of bankruptcy. Because the federal government crafts bankruptcy legislation and bankruptcy law is decided on the federal level—and yet, bankruptcy law is regulated on the state level—differences can emerge in the way cases are handled, especially where same-sex couples are involved.…

Having to file bankruptcy can be stressful on a family, and even more damaging for a married couple. However, when things go wrong with a relationship during bankruptcy, it’s not typically the result of the bankruptcy. Most often things were going bad before that. We see it happen more often than we should. When things go bad, it becomes that much harder to tell a loved one about the problem.

A survey conducted at the end of 2010 by CESI Debt Solutions and mentioned in a recent MSNBC article, demonstrated that of the 200 people who took part, 80 percent admitted to spending money that their spouses did not know about.…

The holidays. A time for figgy pudding, partridges zipping around pear trees and maids milking barn animals. Those are well and good signs of happiness and all, but we’re here to dole out gifts that really sparkle under the tree, the kind that keep on giving and never need be returned. We give you, joyous reader, the 12 Days of Bankruptcy.

On the first day of bankruptcy, the bankruptcy code gives to you: an automatic stay. This gem of a benefit to bankruptcy ceases all pending lawsuits filed against you by creditors upon the approval of your petition. You will probably still have to pay any tax lawsuits or student loans that you have out there, but hey, this is only the first day!…

By it’s very name, a Chapter 7 liquidation bankruptcy sounds like a process that would leave you not only without any debt, but also without any property or assets left over to show for it. As a result, many people considering Chapter 7 bankruptcy worry about losing their biggest asset—their home—in the process. As such, even folks who desperately need the debt protections afforded by Chapter 7, more often than not delay their bankruptcy filing, waiting for another solution that could also allow them to hold onto their home.

If this is your own personal justification for avoiding a personal bankruptcy under Chapter 7, fear not.…

If you’re reading this, odds are you’re considering bankruptcy. As such, you have a lot on your plate. Yet, what might make you feel a bit better about being bankruptcy bound is the knowledge that you’re not alone. Millions of average Americans just like you are facing desperate circumstances as they struggle to stay afloat in the wake of this decade’s Great Recession—facing foreclosure, job insecurity, and, of course, insolvency.  In the series, Our Great Recession 2.0, we’ll delve into some of the more unique stories of this decade’s unprecedented economic downturn, allowing you to see familiar faces and dire places people are going in order to handle the financial meltdown head-on.…

This unrelenting economic downturn has been tough on all Americans—whether they be single, dating, engaged, married or widowed. But, as anyone who has ever been married already knows: money (or lack thereof) can be the main cause of many couple’s marital strife. As a result, in this especially difficult economic climate—full of job insecurity, foreclosures, and slow economic gains—many have been pushed to the brink of bankruptcy, and, along with them, the people who love and wanted to marry them.

So what should you do if you are preparing to marry someone drowning in debt?

While as a general rule, you are not liable for your spouse’s debt, in some cases the debt follows the “I Do’s” and you may end up paying that debt anyway.…

For many people, divorce can cause a huge financial strain in already tough economic times. In others cases, it’s the crushing weight of debt that leads to the dissolution of a marriage.  Whatever the ultimate cause, and effects, when considering bankruptcy amid a divorce it’s important to know a few basics.

Divorce Decrees and Bankruptcies
Because your bankruptcy only includes debts in existence at the time of your bankruptcy filing, a subsequent divorce decree (i.e., a divorce decree following the date of your bankruptcy petition) remains intact and won’t be included in the debt dispensed by your bankruptcy. While few attorneys would urge you to continue in a bad relationship for money, some good advice might be to time your bankruptcy filing so that it follows (and includes) the divorce decree or separation agreement.  Keep in mind that only Chapter 13 bankruptcy discharges debts and equitable distribution obligations, as long as they are not considered alimony or child support or in lieu of either kind of domestic support.  Sometimes, obligations to pay the other spouse’s attorney fees related to the separation or divorce might sometimes be considered domestic support obligations and therefore non-dischargeable. 

All obligations under a separation agreement remain intact and enforceable after a Chapter 7 bankruptcy, as Chapter 7 does not afford the debtor a discharge of any separation or divorce-related obligations.…

Are you feeling too broke to break out of debt? For those ready to end the cycle of debt, it is important to understand that bankruptcy is not a one-size-fits-all solution, and bankruptcy filings are complex cases catering to your individual economic needs.

Bankruptcy, like so many areas of the law, is in a constant state of evolution, having been refined and redefined over the decades and through several important pieces of legislation. The first major bankruptcy legislation since the Chandler Act of 1938— Bankruptcy Reform Act of 1978—brought some of the most significant changes to the U.S. Bankruptcy Code. Within this Act, there were a host of important changes that the Act brought to the U.S.…

For most bankruptcy bound individuals, a discharge of all individual debts is considered the Holy Grail of any bankruptcy filing, yielding a permanent injunction that prevents creditors from collecting on debts. However, any good discussion of debt dischargeability also tackles the primary exceptions to look out for when considering any bankruptcy filing.

Exceptions to the power of a bankruptcy discharge, include:

Certain Tax Obligations
Withholding taxes are not dischargeable in bankruptcy, although you may be able to use a Chapter 13 case to pay these over time (notwithstanding any accrued penalties and interest).  Similarly, sales taxes are not dischargeable, but again, Chapter 13 can establish a payment plan for lessening the load and paying this out over the long haul.…

The decision to file for bankruptcy is never an easy one, especially where married couples are involved. Spouses must settle issues of dishonesty, mistrust, and frustration–and that’s even before any of the complex steps of collecting necessary documents and filing papers.

But the story for insolvent couples does have a caveat: joint bankruptcy protection. Married debtors can file their cases jointly with one trustee, one filing fee, and one total case. Debtors can bring to the table their joint debts as well as debts they hold only in their name. To be a joint case, the debtors need only be legally married.  And they must be a man and a woman.…

This unrelenting economic downturn has been rough on all Americans—whether they be single, dating, engaged, married or widowed. But, as anyone who has ever been married already knows: money can be the main cause of many a marriage’s marital strife. As a result, in this especially difficult economic climate—full of job insecurity, rising mortgage costs, health care uncertainties and other mounting money woes—times have never been tougher for couples pushed to the brink of bankruptcy.  Many are left to wonder, who or what can help?

Yet, no matter how tough the economic tide, laying blame to your spouse for your family’s financial problems can be a dead end road that often leads to, at best, long-term distrust, and, at worst, the dissolution of the entire marriage.…

In this special series, entitled “Bad Ideas for the Bankruptcy Bound,” we’ll introduce what to avoid when bankruptcy is your next, best step.

Love may move mountains,
but money can crumble the strongest marriage.
– Ron, Lieber, The New York Times

Everyone who’s married knows: money can be a primary cause of marital strife. As a result, in this especially difficult economic climate—full of job insecurity, rising mortgage costs, health care uncertainties and other mounting money woes—many debtors who have accumulated all kinds of debt without the knowledge of their spouse are sometimes tempted to file for bankruptcy “secretly” and avoid sharing the financial “bad news” with their spouse.…

We’ve all heard that money problems are the leading cause of marital problems. If you’re reading this article, chances are you’re experiencing both problems. In this economy, with unemployment, foreclosures, and debt at record highs, you’d be hard-pressed to find couples who don’t fight about money!

Financial problems can wreak havoc on your marriage, leading to constant arguing, blame-laying, and even divorce. In fact, when the economy suffers, couples are far more likely to consider divorce as a solution to their problems.

Some couples might think this solution sounds reasonable, even tempting. No more fighting about—you guessed it—money. No more seething tension fueled by bills, debt, and money worries.…

Are you a married couple, but only one of you earns income and holds assets? Or maybe only one of you has acquired debt during your marriage? If you’re married and considering a bankruptcy, you might be wondering whether you and your spouse both have to file bankruptcy.

The answer: while you and your spouse do not both have to file bankruptcy, usually, if a bankruptcy is necessary for one spouse, both spouses will end up filing.

If, for instance, both you and your spouse are liable for a debt and only one of you files under Chapter 7, the creditor may later attempt to collect the debt from the non-filing spouse, even if he or she has no income or assets!…

Many of us now come into marriage with some debts in tow. Some of us also arrive owning some of our own property. Once married, we incur new debts, jointly or separately; for example, one spouse may finance a car under his name, while both spouses may need to list their income together when they borrow for a new home. In addition, you may have credit cards and checking accounts in your own name, and some held jointly.  Sometimes one spouse will have the legal responsibility for credit card debt, but the other spouse, as an authorized user of the account, has the ability to add to it.…

A thoughtful, measured strategy for your bankruptcy can help you in a number of ways when a divorce seems inevitable or is already underway. A good plan can help ease tension between yourself and your spouse, for example, by reducing fights about who is responsible for this or that bill. Not only is this expensive, aggravating, and likely to sour an already acrimonious process, it may be completely unnecessary. You may find that bankruptcy can get rid of those bills altogether! Thus, there will be no need to assign a bad guy.

If you have already finalized the divorce, bankruptcy is often the best way of getting back on track financially.…

This may come as a surprise to some, and huge relief to others: bankruptcy can be filed by one spouse without the other. The big question is: SHOULD you file without your spouse? Like most aspects of bankruptcy, the answer will depend on your particular situation.

Resorting to declaring bankruptcy can be a source of nervousness, fear, and you may be genuinely concerned about keeping your filing private. Many people contemplating filing want to be reassured that their bankruptcy won’t be published in the newspaper, that their employer won’t have to know, that in-laws won’t be informed, their kids don’t have to know, their kids’ teachers, their pet groomer, their neighbors … etc.…

Marriage is a partnership, and it works much better with each partner pulling his or her own weight. To avoid problems down the line, it’s a good idea for each partner to establish and maintain a separate credit identity. As a matter of fact, that is how the law will see it in all but the nine community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.) This means that if your spouse takes on a financial responsibility without you, you will not be legally liable for it, and vice versa. But it also means that good financial behavior on the part of your spouse won’t necessarily reflect on your credit report, even if you share in the actual payments.…

One of the big myths in the minds of people who are in debt and happen to be married is that bankruptcy leads to divorce. Yes, along with medical bills and job loss, divorce can be considered a leading contributor to bankruptcy, since it can put one or both ex-partners in a significantly more fragile economic position, and ultimately lead to a perilous situation that can be remedied no other way. That situation can happen after a divorce, but the idea that an otherwise happily married couple that files bankruptcy will inevitably land in divorce court is just false.

There is absolutely no doubt that financial problems put stress on a marriage.…

How many people enter into marriage these days totally debt-free? Probably fewer than you would think. Debt might have been accrued from the often inevitable student loan, through inexperienced or irresponsible spending, or even by footing the bill for a once-in-a-lifetime wedding and honeymoon extravaganza. For those taking the plunge for a second or third time, the debts could come from a myriad of sources. Regardless of where it comes from, premarital debt is going to be a consideration for couples contemplating marriage more often than not.

The fact is, only a very fortunate few couples have the luxury of starting out their new life together debt-free.…