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How Will My Fiancé’s Bankruptcy Affect Me?

You know you’re in love when you can’t fall asleep because reality is finally better than your dreams.
~Dr. Seuss

Love is an unstoppable force. It is also usually blind to consequences. Just ask Shakespeare’s Romeo and Juliet. If your fiancé has filed a bankruptcy, you should ask questions in order to avoid financial complications.

The most important question is whether you or your fiancé own property jointly that may be included in the bankruptcy. Since you did not file bankruptcy, your individual property is not affected. However, you need to protect your property interests for any jointly owned property that is part of the bankruptcy estate. That is property that was owned jointly before the bankruptcy filing, or acquired using money that was part of the bankruptcy estate. In a Chapter 7 bankruptcy, the bankruptcy trustee may be able to take and sell the property, keep your fiancé’s share to pay creditors, and pay you your share in cash.

If you don’t own joint property and your fiancé has filed a Chapter 7 bankruptcy, you are not impacted at all. Your fiancé’s case should be over around four months after it was filed, assuming it is a no-asset case.

If your fiancé filed a Chapter 13 case, things become a little more complicated. If you get married before your fiancé’s Chapter 13 plan is confirmed, the plan payment may increase. If the plan has been confirmed and you get married, the payment will likely not change. The issue is household income. If you and your fiancé are already cohabitating, the plan will not change after you get married.

Theoretically, the bankruptcy trustee can also stake a claim to your fiancé’s portion of any large joint income tax refund. However, you are entitled to your portion and there are other legal defenses that may be available to you to protect the refund.

Getting married is a joyous event. Bankruptcy usually has no affect on a new marriage, but it is always wise to consult with an experienced bankruptcy attorney before taking the plunge.