Debt and I Do's: 5 Things to Consider When Marrying Someone Who Filed Bankruptcy

Happily ever after is great, but what about the money? Marrying after bankruptcy takes planning

Image source: Flickr user Jason Sussberg

If you've found Mister or Ms Right and are ready to commit to happily ever after, that's great. But what if the love of your life has had money troubles and recently filed bankruptcy? This takes some serious thinking, not because bankruptcy itself is a red flag, but because you want to be sure your new marriage gets off to a good start and you're financially compatible. Today we look at five considerations before you walk down the aisle.

#1 Find out why your intended filed bankruptcy

This is numero uno in importance and, if you know before the engagement that your future partner filed, you should find out before you make plans to marry. Why? Not because bankruptcy itself should carry a stigma, but because you want to make sure that the root cause is addressed. If it was a job loss, you should have a frank discussion about career plans, perhaps some additional training or schooling or even a career change to prevent the occurrence. If it was a one-time thing, like an accident that kept them out of work or a divorce, that's less of a concern. The main thing is to figure out what happened to keep it from happening again.

#2 Find out what debts remain after the bankruptcy

Bankruptcy does not wipe out all debts. Medical bills, credit cards and other unsecured debts are usually wiped out, as are back taxes from two or more years that were filed on time, but weren't paid. Student loans usually stick around, as does a mortgage or car loan if you decide to keep the property. You need to get an accurate assessment of what debt your partner has before you say “I do” so that you can set your financial priorities and be sure you don't take on any more debt together than you can afford on your salaries. You should also reveal your own debts, that's only fair. Be sure the lines of communication are open about finances to protect both your futures.

#3 Figure out if you're financial compatible

This one is the big issue. If one of you is a spender that can't hang on to money and constantly racks up debt, while the other is a saver, that can balance out, but may frustrate both partners. And if you're both spenders and there's not a saver in the relationship, that can spell financial doom for your partnership from the start. Compatibility in finances is as important as it is to other aspects of your relationship. Figuring this out before you wed is important so that you both know what you're getting into and there are no surprises lurking down the road. You don't need to be the same when it comes to money, but you need to share goals, values and agree on how to operate as a couple.

#4 Plan how to protect your assets and income

You may be excited about opening up your first joint checking account as you join your lives, but marrying your finances may not be the best idea at this point. Bankruptcy will lower your partner's credit score for a while and there's no reason to drag yours down with it. If they are careful with their debt post-filing, they can rebuild their score and, in the meantime, yours can be protected. Keep your money separate, don't take on debt together and hold off on major purchases in both names like a mortgage until your partner's credit score has recovered.

#5 Consider financial pre-marital counseling

The major source of strife in any marriage is money issues. It's a hot button topic and you don't want to let finances ruin your new union. Pre-marital counseling is a great way to smooth out any other relationship issues, but also consider financial counseling before marriage to get you off to a smooth start when it comes to money. This is an opportunity for you to set goals together, develop a realistic budget based on both your incomes and debt profiles and lay out a financial road map that can get your marriage off to a solid start and minimize blows-ups over money.

If you're planning on getting married and one of you is deep, deep in debt with bills you just can't pay, filing bankruptcy prior to the wedding can get your marriage off to a better financial start without overwhelming debt. Contact the North Carolina bankruptcy experts at the law offices of John T Orcutt to find out more about getting debt-free before you say I do.