In the excitement of a newlywed life, dreams of building a home and future together can overshadow the financial challenges ahead. Accumulating debts from loans taken to furnish this new life can lead to unexpected issues. This includes the possibility of facing a debt collector’s lawsuit.
In such situations, Chapter 7 and Chapter 13 bankruptcies can provide much-needed relief for newlyweds seeking to regain control of their financial well-being.
Chapter 7 bankruptcy
Under Chapter 7 bankruptcy, eligible individuals may be able to have their unsecured debts discharged. Unsecured debts, as the name suggests, lack collateral. Examples include credit card debts, medical bills and personal loans. Although not all debts are dischargeable in Chapter 7 bankruptcy, these are usually obligations such as student loans and child support payments, which may not apply to newlyweds.
Chapter 13 bankruptcy
Another choice is Chapter 13 bankruptcy. This involves a repayment plan where individuals can make regular payments to creditors. It usually covers three to five years to satisfy debts partially or fully. This can be an option for those with a regular income but need time to catch up on overdue payments, like mortgage arrears or car loans.
If you default on your payments, the creditor can seize the asset to satisfy the debt. If you wish to keep your assets, you must continue paying for secured debts. But it may be possible to change certain secured debts in a Chapter 13 repayment plan.
Facing overwhelming debts can be challenging, especially when they accumulate during significant life milestones like marriage. However, understanding the options available to address these financial burdens can bring hope and pave the way to a brighter future.