File bankruptcy what if my spouse and I cannot agree?

Recently on our bankruptcy blog a user asked, “My spouse and I are facing a serious financial crisis. We have an unsecured loan of $59,000, school debts, credit card bills exceeding $20,000, and medical expenses from a cancer scare last year. I have been raised to believe that if you owe money you pay it. My spouse says that there is no way that we can ever repay our debts. Is it ever okay to file bankruptcy?”

Is it the right choice to  file bankruptcy?

Whether or not you should file bankruptcy is a personal decision that must be made by every debtor after reviewing their own financial situation. There are millions of good, responsible people that file bankruptcy each year. There are also millions of people who file bankruptcy who simply made poor financial decisions and will continue to make them even after their debts are discharged.

With that in mind, let’s review some things you need to consider when deciding whether or not to file bankruptcy:

  1. How did you get where you are?

Before making any decision about filing bankruptcy you need to make an honest assessment of your situation. Was the debt accumulation caused by decisions you made or was it due to unforeseen circumstances? For example, if you used your credit card to buy unnecessary clothing, jewelry and shoes that’s a lot different than if your credit card was used to pay for necessary living expenses because you depleted your savings paying your medical bills.

  1. Have you done everything you can to pay down your debt?

The next question you need to ask yourself is whether you have done everything possible to repay your debts. This can include creating a budget, getting a second job, selling assets, and downsizing to a smaller home.

Filing bankruptcy should be your last resort. It should only be done after you have exhausted every other option. Unfortunately, because the social stigma of filing for bankruptcy no longer exists and filing bankruptcy is so easy, many debtors file bankruptcy too quickly and do not consider all of their other options and the serious, long-term ramifications of their decision.

  1. What will filing for bankruptcy do for you?

Filing bankruptcy will not discharge all unsecured debts. For example, filing bankruptcy will not discharge student loans (exceptions exist), recent tax debts, spousal support, child support, and some criminal restitution fines. It also will not discharge any secured debts.

You mentioned you have medical bills, credit card debt, and a large unsecured personal loan. If you are able to file for Chapter 7 bankruptcy these debts are likely to be discharged.

  1. Consider the long-term consequences of your decision.

It’s easy for debtors to get excited about eliminating or reducing certain unsecured debt obligations. What many debtors fail to do, however, is consider the negative consequences of filing bankruptcy. While you may not have the debts, your credit score is likely to decrease, you may have difficulty getting credit or buying a car, and you will not be able to buy a house for several years.

Bottom Line:

Before deciding whether or not to file bankruptcy it’s important to step back, review your situation, and consider the pros and cons of filing and not filing.

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Beth L. is a content writer for Better Bankruptcy. Good content and information is one of many methods we utilize to bring you the answers you need.