Married couples facing financial difficulties have the right to file bankruptcy jointly. However, the same is not true for unmarried cohabiting couples. For couples who have co-mingled their finances but who are not legally married, filing bankruptcy offers it's on set of problems that require unique strategies. Let's take a look at a few facts:
Joint Credit Accounts
If you and your partner opened a credit card account together, you are both financially responsible for repaying the debt. If one of you files bankruptcy, the other may face collections actions depending on what type of bankruptcy has been filed. If Chapter 7 bankruptcy has been filed by one party in the relationship, the creditor will have the right to go after the non-filing debtor almost immediately. But in Chapter 13 bankruptcy , the credit card company will need to refrain from attempting to collect on the debt until after the Chapter 13 bankruptcy case has been closed which could take three to five years.
Holding Onto Secured Property
If you and your cohabiting partner want to keep property which is attached to a loan, this will require careful pre-bankruptcy planning. For example, it may be more difficult to hold onto a vehicle with only the filing partner's name on it, if that filing partner cannot afford to pay the car note in the bankruptcy. Even if the non-filing partner has the cash, they won't have the same type of leverage as a spouse would have in bankruptcy. Because of this, the cohabiting couple will need to work closely with the bankruptcy attorney to negotiate some type of settlement with the creditor.