Bankruptcy for Unmarried Couples


Couples who live together as a married unit but don't have the legality of an actual marriage cannot file for bankruptcy together, even if their debt was jointly incurred.

Gay Marriage and Bankruptcy

Although there was much celebration in the summer of 2011 when the state of Illinois allowed same sex civil unions there are still some limitations to couples who have taken advantage of Illinois's acceptance of their relationship. One big limitation shows up when the couple wants to file bankruptcy. Bankruptcy falls under federal jurisdiction which means federal laws apply so even if a state allows a same sex union the federal government doesn't recognize it when it comes to bankruptcy.

The only exception came about in July of 2011 when the government said it will recognize same sex marriages, and the keyword is marriage. The state has to allow same sex marriages, not civil unions, which means that couples in Chicago and Illinois still have a ways to go until they can file for bankruptcy together, but you should speak to a bankruptcy attorney anyway to see what loopholes may apply.

Non Married Couples and Bankruptcy

For other couples, gay and straight, who aren't married filing a joint bankruptcy isn't an option, which can make it difficult to divide some debt, assets and finances. There are some other downfalls to filing separately, a big one is double the expenses when it comes to paying legal fees and filing.

Not being married does have some advantages when it comes to filing bankruptcy as well. If only one of you is fiscally irresponsible, that means one of you can avoid the bankruptcy, protect their credit, keep some of your possessions, and stand a better chance of getting secured loans in the future. If a couple in this situation sees a bankruptcy attorney months before filing they may be able to protect even more of their assets.

It's a tricky situation when a non married couple wants to file joint bankruptcy and since the laws seem to be changing routinely its best to seek the advice of a Chicago bankruptcy attorney before you proceed.