How will bankruptcy affect my family?

Frequently asked questions about bankruptcy and how it affects family relationships.

We understand that when you’re making financial decisions you’re usually thinking about the people close to you! We’re a close-knit family business ourselves. There are a few questions we see over and over when it comes to bankruptcy and family, and we want to help you navigate the ways that bankruptcy may affect your relationships. Here are the questions we see often; but if you have others remember that your first bankruptcy consultation with us is free! Just call 503-385-8888 and we’ll be able to set up a time to discuss your case personally.

Do I need to file bankruptcy with my spouse?

The answer to this really depends on your finances! If most of your debts are jointly held, in both of your names, then you will need to file together. In cases where most of the debts are in just one name, sometimes it is possible for that spouse to file for bankruptcy on their own. When it is an option, it can protect the other spouse’s credit and assets.

This is also a more complicated case if you and your partner are not married, or are separated or divorcing. This is where general advice on the internet simply won’t be enough to help you make the best decisions for your financial future. You’ll need personal, professional legal advice tailored to your needs. Rank & Karnes Law, P.C. is here for you. We’re proud to offer both bankruptcy and family law services that can not only answer your questions, but help resolve the problems you may be experiencing.

Can I pay off some debts & file bankruptcy for the rest?

Sometimes when you’re in a tough spot financially you turn to the people you love most to help you out. If you’re still unable to right the financial ship and get yourself out of trouble, you start looking into bankruptcy. But it can feel especially difficult to declare bankruptcy if that means leaving friends or family members unpaid. We understand that’s an extremely difficult position to be in.

However, bankruptcy laws simply do not allow distinctions between creditors. You will need to declare all debts and creditors, and you cannot repay family or friends right before or during a bankruptcy filing. Doing so will land you in trouble with the bankruptcy court and the court will actually try to recover what they term “preference payments” before you would be able to discharge any debts. The short answer here is no. You cannot pick and choose debts to pay if you decide to declare bankruptcy.

Will everyone know that I filed for bankruptcy?

Bankruptcy filings are part of the public record, which means that people can search and find the names of people who have filed. There is not a way to seal your bankruptcy filing or make it secret or private. However, the only people who will be notified of your bankruptcy are your creditors, the people to whom you owe money. Which means that realistically, unless your friends and family make a habit of combing the bankruptcy court filings for names they recognize, most of the people you care about won’t know unless you choose to tell them.

Can bankruptcy affect my family in a positive way?

Honestly? Yes! Navigating bankruptcy with family issues is not easy, but removing the weight of facing overwhelming debts will make a huge difference for your family’s health and future happiness. Our goal is to help you make decisions that will help you get back on your feet so that you can be there for your family in the long term. If you want to read about how our clients have felt after they called and asked for our help, see their testimonials here. If you want to schedule your free consultation today, visit our contact page here. You don’t have to wait to feel relief, you can get help today!