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Bankruptcy: How it Affects your Spouse

Marriage means much more than just living with someone, it means sharing a life together and that life includes your finances. Still, sometimes one spouse may need to declare bankruptcy to get out from under their debts, even if husband or wife does not. There are any number of reason why this may be the case.  The filing spouse may have racked up credit card debt as a college student or may have incurred medical expenses that the other spouse isn’t liable for. If you are married, you often can file for bankruptcy without your husband or wife. Even when you file and individual bankruptcy case, it may still have a profound effect on your non filing spouse.

How Bankruptcy can Affect your Spouse:

Generally speaking, if you are filing for an individual bankruptcy case, it will not have much of an effect on your spouse in many cases. One of the areas in which it may have an impact is If you have joint debts discharged in the bankruptcy. By doing this,  the bankruptcy may appear on your spouse’s credit regardless of whether they have filed.

Also, when you file for bankruptcy, it only eliminates your personal debt, but your husband or wife is still obligated to pay back their own debts and any joint debts that they may be on with you. Your creditors can pursue legal action against your spouse to collect your joint debts once you have filed for bankruptcy. While this past statement is true if don’t life in a community property state, if you do live in a community property state and discharge the debts you owe jointly with your spouse, the creditors cannot pursue collections against your marital community property after your bankruptcy. In this case, your spouse benefits from discharge of your joint debts.

Filing for Chapter 13 bankruptcy protection can protect your spouse from creditors with the Co-Debtor stay. A Co-Debtor protects the debtor against almost all types of debt collection activity by virtue of you having filed for protection yourself. A chapter 13 also prohibits creditors from pursuing your co-debtors during the course of your bankruptcy. However, in a chapter 7 bankruptcy, the co-debtor stay is not included. At that point a collector will not be able to collect the debt from you, but it can collect it from your spouse.

Finding Financial Freedom:

Filing for bankruptcy is a last resort for many and a challenging process for everyone, especially if affects your loved ones. Understanding what your options are helps you both make good decisions that can get you back on the road to financial prosperity and security. If you are considering filing bankruptcy, contact our experienced bankruptcy attorneys today so they may explain the different options you have available to you under the law. Harmon and Gorove has helped thousands of families recover from difficult financial situations over the course of the last 35 years.  Contact our office today for a free, no obligation consultation.

Are unpaid medical bills keeping you up at night?

Medical bills are among the top reasons why people file bankruptcy. The Medical industry is rife with complaints about how charges are calculated and it has little transparency in how much each procedure will cost. Many Americans have no idea how much each visit to the doctor will ultimately cost and even less of an idea about how much a procedure or hospital stay will set them back.  This is especially true of people who do not have medical insurance. The nature of Medical care is that it’s something that often times can’t be put off, especially in emergency situations. With the average cost of an ambulance ride nearing $1,000 and the cost of an air ambulance being $50,000 or more, just getting to a hospital in an emergency situation can bankrupt even the most well off citizens. The choice to seek medical care stresses many Americans, including those with health insurance.

CBS News reports that nearly 25 percent of adults in the U. S. have an unpaid balance on a medical bill. Numerous factors may be involved in why this is the case and who the most indebted people are. Many imagine that the elderly are the group most likely to have unpaid medical bills but it’s actually  people between the ages of 20 and 50 that hold that distinction.

A recent study found that geography plays a role in who often incurs debt for medical care which they can’t afford. The Atlantic states that people who live in The South are more likely to find themselves with medical debt. In fact, of the top 10 states with the highest rates of medical debt, eight are Southern States. Some reasons may include an overall higher need for medical care as many people in the South lead less healthy lifestyles which often requires more medical attention.  Many of the states also did not expand Medicare coverage under the ACA.

Georgia is one of those states in the top 10, coming in squarely at number 10.  37 percent of people in Mississippi have unpaid medical bills while just under 30 percent of Georgians have unpaid medical bills.

Unpaid Medical bills can put a larger strain on the budgets of people who are already finding it hard to make ends meet.  Many doctors and hospitals routinely turn those bills over to unscrupulous and predatory debt collection agencies who constantly harass people, including at work, with threatening phone calls and nasty letters. Some debt collection agencies report negatively on your credit while others go so far as to sue you and garnish your wages.

If you find yourself being harassed, sued or garnished by debt collectors over unaffordable medical bills call the attorneys at Harmon and Gorove and allow us to schedule a free consultation so we can develop a plan to help relieve you of the stress that these unpaid medical bills cause.  We can help you get started on the path to financial freedom today!