There are some life events that represent major changes.  Getting married, having a baby, and relocating are great examples of milestones marked with great excitement, as well as significant changes in expenses and financial responsibilities. If you’ve found yourself approaching any of these changes while you’re struggling with debt, you may be tempted by the idea of cleaning your economic slate by filing for bankruptcy. Before you jump into this decision, let’s take the time to investigate whether it is actually a smart move.

There’s no doubt that bankruptcy can offer relief from overwhelming debt. It puts an end to the stress created by collection efforts and provides a fresh start. If you have significant unsecured debts like credit cards, medical bills, or personal loans, filing for a Chapter 7 or Chapter 13 bankruptcy might make sense. Still, timing matters—especially when any of the following big life transitions are looming.

• Getting Married – Marriage generally introduces shared finances. Your future spouse’s financial health will become enmeshed with yours, and though they won’t be responsible for your pre-marriage debt, any joint accounts or property you acquire once you’re married will be complicated by a bankruptcy filing that comes after the wedding. Filing before your marriage is a good way to protect your future spouse from financial entanglements and avoid dragging their credit score into your financial issues.
• Having a Baby — Expanding your family means increased expenses: Those little people are expensive, from birth to nursery expenses to healthcare to childcare. Filing for bankruptcy would free up resources by eliminating or reorganizing debts (depending on whether you choose a Chapter 7 or Chapter 13 filing). But while it would let you redirect money toward your growing family, it will also impact your credit for up to 10 years. If you’re thinking of buying a larger home or purchasing a vehicle, your filing could make it harder to qualify for financing.
• Moving – Whether you’re moving around the corner into a better apartment or purchasing a new home, a bankruptcy filing can limit your ability to secure new housing, especially if you’re looking to buy or rent a place that requires a credit check. However, if your current financial situation or poor credit would make moving impossible or unmanageable, bankruptcy may be what you need to make a fresh start in a new location. Also, the bankruptcy exemptions and laws in your state can affect what happens if you file before or after relocating.

Filing for bankruptcy can be a smart move if it’s done strategically. If you’re struggling with debt and have big life changes on the horizon, contact our experienced bankruptcy attorneys to discuss the options that will work best for you.