Since June is just around the corner, we are getting a lot of calls from potential bankruptcy clients who are asking, “Should I file bankruptcy before I get married?” Love is in the air. I can just hear that song right now. Click here if you want to know what song I’m singing.
The important bankruptcy questions to consider before getting married are:
- How would the bankruptcy means test look before you get married?
- How would the bankruptcy means test look if you waited until after you get married?
When a person files bankruptcy, the court looks at the income of the entire household. Thus, if you are going to marry someone who has a large income, it is possible that your spouse’s income will disqualify you from filing Chapter 7.
Let me give you an example. Suzie Q. was in a serious car accident. No one thought that she could recover. However, the grown up boy next door comes to visit Suzie in the hospital. The two fall in love. Her spirits are lifted and she miraculously has a complete recovery. While she was recovering, Suzie accumulated a massive amount of medical debt that her health insurance refused to cover. Dashing Mr. Grown Up Boy Next Door has a super high income. As a consequence, she decides to file bankruptcy before the wedding and then lives happily ever after. I just love happy endings!
In contrast, if you are going to marry someone that makes zero income, it might be a good idea to wait until after the wedding to file bankruptcy if you are slightly over the median income. The reason is that the more dependents you have, the higher income you can make and still qualify for Chapter 7. For example, what if Dashing Mr. Grown Up Next Door needed to file Chapter 7 but was barely over the median come? Assuming that Suzie Q. has zero income, it might be a good idea for him to wait until after the wedding. Also, since Suzie Q. has so many medical bills, it might be better to wait so that they can file together.
Please do not rely on this blog post or anything on the website as legal advice. If you want legal advice, you must meet with a local bankruptcy attorney. Every case is different. One rule that may apply to your friend’s case may have absolutely no relevance to your own bankruptcy case.