How To Face Bankruptcy As A Family With An Attorney

Bankruptcy is a complex and stressful process for anyone, but it can be incredibly challenging for families. When a family member files for bankruptcy, it can produce a ripple effect on everyone in the household, affecting finances, relationships, and even physical and emotional well-being. Working with a Bankruptcy Lawyer, who can help navigate the legal process and advocate for the family’s needs, is essential. 

This article will discuss the special considerations for bankruptcy in different situations, such as when a child has special medical needs, the filer has extraordinary medical conditions, when one spouse wants to file but the other doesn’t, and the decision of which chapter to file.

Rebuilding Your Financial Future: Essential Strategies For Managing Bankruptcy As A Family With The Help Of An Attorney

Impact Of Bankruptcy

Filing for bankruptcy can be a difficult and stressful process, especially for families. It is essential to consider the various challenges and issues that may arise when it comes to bankruptcy, such as the impact on children with medical needs, the filer’s health, disagreements between spouses, and the sale of marital property. Understanding these issues and how to handle them can help families navigate the bankruptcy process with confidence and ease.

Children With Extraordinary Medical Needs

The process can become even more challenging when a family has a child with extraordinary medical needs. The cost of medical care for the child can escalate the financial burden on the family. Bankruptcy can forgive past medical debt and help a family budget for future medical emergencies. This is why families must work with a Bankruptcy Attorney who understands the impact of medical costs within the context of bankruptcy.

Every bankruptcy case is unique. When a family has a child that is experiencing a health emergency, medical debt can quickly accumulate. Additionally, a common concern is the healthcare coverage of children. If the child’s coverage is impacted, it could make it difficult for the family to afford necessary medical care. In such cases, the family can work with an attorney to find solutions.

The Health Of The Filer

The bankruptcy process can be even more challenging when the filer has medical needs. They may be unable to work, making it difficult to pay bills and maintain a household. This can add to the already overwhelming financial stress that the family is facing. In these cases, the filer needs to work with a legal practitioner who can help navigate the legal process and advocate for their needs.

When the filer has extensive medical needs, it’s essential to consider how the medical expenses will be paid for during the bankruptcy process. A Bankruptcy Attorney can help determine if and how bankruptcy can discharge debt (freeing up disposable income) and establish a budget to pay for ongoing medical expenses. 

A filer’s attorney must also be mindful of their client’s well-being and how the bankruptcy process could impact their client so as to minimize any stress in order to prioritize the filer’s health. Thus, a Bankruptcy Attorney should explore options to reduce stress and ensure that the filer has access to necessary medical care and emotional support during the bankruptcy process.

Disagreements Between Spouses 

When one spouse wants to file for bankruptcy but the other does not, it can be difficult to navigate the legal process and make decisions about property and assets. In these situations, the couple needs to work with an attorney who can help guide them through the process and ensure that the rights and interests of both parties are protected. Communication between spouses is essential in these situations.

It’s important to understand that bankruptcy is a collaborative process, meaning both spouses will be affected by it regardless of one’s decision to file. The couple should seek a lawyer’s help to understand the implications of their decisions and the financial options available to them. It’s also important to consider the impact on the couple’s assets and property.

In some cases, the couple may decide to file jointly, while in others, one spouse may file individually. It’s essential to understand each option’s legal implications and work with an attorney who can guide them through the process. With the help of a Bankruptcy Lawyer, the couple can agree and decide what is best for their family. When the stress and burden of crushing debt are eliminated, it can help improve marital relations, quite possibly saving a marriage!

Disagreements On Selling Marital Property

When couples want to sell marital property, but one spouse disagrees, it can be difficult. Marital property is property acquired during the marriage and is considered jointly owned by both spouses in community property states like Texas. 

Filing for bankruptcy may not directly help with a disagreement between spouses when selling marital property, as bankruptcy is a legal process that deals with the discharge of debts and financial obligations. However, bankruptcy may indirectly provide relief in certain situations.

When a married couple files for bankruptcy, the court may order an automatic stay, which is a legal order that temporarily stops most collection actions, including efforts to sell marital property. This stay can provide a brief period of time for the couple to negotiate and come to an agreement on how to divide their assets, including the marital property, without the added pressure of ongoing collection activities.

Additionally, bankruptcy may help eliminate certain debts and liabilities that are associated with the marital property. For example, if the marital property is subject to a mortgage or other secured debt, filing for bankruptcy may discharge the debt and relieve the spouses of their obligation to repay it. This can make the marital property more attractive to potential buyers and make it easier to sell.

However, it’s important to note that bankruptcy can be a complicated and potentially risky process, and it may not be the best solution for every couple. It’s important to consult with a qualified bankruptcy attorney to fully understand your options and the potential consequences before deciding to file for bankruptcy.

Navigating Bankruptcy As A Family: Expert Guidance From An Attorney

Chapter 7 vs. Chapter 13 Bankruptcy For Families

Families facing financial difficulties may find relief through bankruptcy, but choosing the right chapter of the U.S. Bankruptcy Code is crucial. The two most common chapters associated with individuals and families are Chapter 7 and Chapter 13.

While many families with average income and average assets also qualify for Chapter 7, it is ideal for families with few assets and low income, as most unsecured debts like credit card debt and medical bills will likely be discharged. The purpose of a Chapter 7 bankruptcy is to eliminate debts and gain debt relief in the process. 

While each case is unique, generally, certain assets such as primary residence, personal property, and retirement accounts may be protected, and a client can keep them. The process usually takes about three months to complete and results in a discharge of certain debts.

On the other hand, Chapter 13, known as the “wage earner’s plan,” provides a repayment plan over three to five years to pay some or all debt. This is a good option for families with regular income. A Chapter 13 bankruptcy is ideal for those who want to catch up on mortgage payments and tax payments.

It’s essential to consult with a seasoned lawyer to determine the best option based on your family’s financial situation. A Bankruptcy Attorney can explain the process for each chapter, the pros and cons, and help your family make an informed decision. Additionally, families should consider and plan for their long-term financial goals. With the help of an experienced attorney, a family can gain a fresh financial start.

How A Bankruptcy Attorney Can Help Families

A Bankruptcy Attorney can play a critical role in helping families navigate the bankruptcy process. Below are some of the ways that they help families. 

  • An experienced Bankruptcy Attorney takes a comprehensive look at the family’s finances, including their income, assets, debts, and expenses, to determine which chapter of bankruptcy is most suitable for them.
  • They explain the steps involved in filing for bankruptcy, including how to prepare and file the necessary paperwork, attend court hearings, and deal with creditors.
  • A skilled bankruptcy lawyer helps families understand the exemptions available to them, which will help them protect their assets during the bankruptcy process.
  • They ensure their client’s rights are protected and their interests are served.
  • They provide support and guidance throughout the bankruptcy process, helping families navigate any challenges that may arise.
  • They can provide peace of mind to families during a stressful and uncertain time. They can help ensure the bankruptcy process goes as smoothly as possible and help families achieve their financial goals.

Call Lincoln-Goldfinch Law For Help

If you’re a family facing financial difficulties and considering bankruptcy, it’s essential to work with a trusted and experienced attorney to guide you through the process. At Lincoln-Goldfinch Law, we have a team of knowledgeable Bankruptcy Attorneys who can help you understand your options and make the best decisions for your case. 

Don’t navigate this complex process alone. Call Lincoln-Goldfinch Law today to schedule a consultation and take the first step towards a brighter financial future.

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About the Author: Kate Lincoln-Goldfinch

I am the managing partner of Lincoln-Goldfinch Law. Upon graduating from the University of Texas for college and law school, I received an Equal Justice Works Fellowship in 2008, completed at American Gateways. My project served the detained families seeking asylum. After my fellowship, I entered private immigration practice. My firm offers family-based immigration, such as greencards and naturalization, deportation defense, and humanitarian cases such as asylum, U Visa, and VAWA. Everyone at Lincoln-Goldfinch Law is bilingual, has a connection to our cause, and has demonstrated a history of activism for immigrants. To us, our work is not just a job. After the pandemic we began offering bankruptcy services in addition to immigration I realized how much lack of information there is in financial literacy resources in Spanish.

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