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How Will Bankruptcy Affect Your Family and People You Are Associated With?

Can a bankruptcy impact your family if you are the only one filing? Many people who are considering bankruptcy are interested in the impact of the bankruptcy to their immediate family or others who they may be associated with in business or acquaintance. The fact is that a bankruptcy filing can be done completely independently and does not necessarily impact anyone else related to you. Here is why.

An individual bankruptcy petition is assigned to the person filing by using a social security number as an identification number for the individual person that is filing. This means that no one else will be considered in the bankruptcy except for the person who the social security number belongs to. There will be no additional impact to a spouse that is married to the person who is filing or any relatives to the person that is filing. The court cannot take any consideration of debt outside of the person who owns the social security number on the petition. A joint filing is also available in bankruptcy where spouses can file together on one bankruptcy petition if married. A joint bankruptcy will eliminate debt from both spouses because both social security numbers will be on the petition. No one else outside of the two social security numbers will be impacted by the bankruptcy in the case of a joint filing.

If you are sharing a credit line with someone else, the credit line that is open to the person on the bankruptcy petition may be impacted. If you have a joint account for your family or business with a bank where you are dependent on the credit line, the person filing the bankruptcy who is named as a guarantor on the account may impact the availability of the credit line since the credit line is dependent on the credit record of both people on the account. A bankruptcy does not require a creditor to shut down a credit line, but some creditors have policies that may instruct them to shut down or lower a credit line if a bankruptcy is filed by one or more of the names and social security numbers associated to the account. To find out exactly what your creditors will do when a bankruptcy is filed, you can contact them ahead of time and ask them what happens to the credit line if one of the owners of the credit line files for bankruptcy.

 

Bankruptcy Law Professionals is a bankruptcy law firm with offices in Orange County and Riverside.  We offer free consultations to all of our clients with our attorneys.  Contact us to schedule an in person or phone consultation at 855 257-7671.

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