An area of confusion for married Tyler residents who are considering filing for bankruptcy is how the bankruptcy might affect their spouse. Often, financial challenges and unexpected life changes can engulf a marriage and affect both spouses. However, there might be certain properties and assets that were kept separate during the marriage. Knowing how this influences a bankruptcy is key before going forward.
The concept of community property means that all property and debts that a couple accrues during the marriage will be presumed as owned by both. It must be remembered that if there was property or debt that came about before the marriage, it might be viewed as separate if the couple maintained its separation after they were married and throughout the union.
When one of the spouses files for bankruptcy, separate assets will be taken into account. Also taken into account will be half the community property assets. When it is decided what can be discharged, the separate debts of the spouse who has filed and half of the joint debts could be part of the process. Filing a joint petition for bankruptcy will mean that all assets and debts will be part of the proceeding.
There are numerous aspects to a personal bankruptcy filing that might not be clear. A married couple that is considering filing for bankruptcy needs to be aware of the possibilities to prevent any surprises. It is wise to try and get a fresh start when financial challenges hit. Bankruptcy is a tool for that. But, it is also wise to understand the ins and outs of the process depending on the situation. Speaking to an attorney can provide that understanding and help with the whole case. For more information, please see our firm’s community property and bankruptcy page.