r/legaladvice suggested I try here instead... My boyfriend and I have been together 14 years, since high school, so our finances have always been 100% wrapped up in each other but we're in Michigan which doesn't have any common law rules as far as I know. We have recently reached the point of considering bankruptcy... our credit is shot, we only owe about $7500 across all our cards and old bills (a few utilities from our very first apartments, stuff like that) but our leased car was just repossessed Tuesday so whatever cost that winds up being is going to come along shortly, and we just don't make enough to dig ourselves out in the next 3-4 years, or until I finish my degree. I figure this HAS to be better than ignoring everything in collections until that point, which has been my strategy for adult life thus far and seems to just wind up perpetuating the cycle where we dig ourselves out, then some emergency happens and we fall behind again.
The car is in both our names, the rest is split between one card we're both listed on and then pretty evenly split between the two of us. We have no assets... we sold our crummy money trap of a house in Detroit last fall and most of the proceeds went to paying back taxes (this was a long, complicated situation involving his mom buying a "fixer upper", putting it in his name, never paying the taxes, and then backing out of her end after we'd gutted it while we were 22 and 23 and in NO position to be finishing a house ourselves) and convincing an apartment complex to lease to us by paying off some of our bills and paying a lot up front.
We're not married now because I rely on the Pell grant for college, and I wouldn't qualify if we were married. We also don't make enough for marriage to be a benefit when it comes to taxes... it would actually reduce our refund by a substantial amount. At the same time, I might have a little more wiggle without having a ton of bills to pay with my tax refund if we did file, and I'm almost done with my associates degree. My BA would be harder to cover, but I could cross that bridge later. I'm lucky so far in that my student loans are pretty small, just covering books and a computer I needed early on.
Anyway, so a couple things:
The payment plan with the lawyer is going to be a good chunk of money for us. We definitely couldn't afford the payment to both file at once unless we were married and it was all one case. I would need to pay one off before starting the next, or...
In theory, I could use my tax refund to file for whichever of us waits if we filed separately. Would the car lease move quick enough that if I waited 6-7 months to file, they'd already have me in court and garnished or anything like that? That's my big fear.
Is there any difference in the effect on our credit scores filing married vs. single and then marrying later? They can't go much lower than they are, but if rebuilding is easier one way I'd take that into consideration.
We're not worried about "just getting married for the bankruptcy"... we've always planned on it but were waiting until I finished school for the reasons I mentioned.
Edit: So apparently it's stupid to file bankruptcy. According to Credit Karma our scores are in the mid-low 400s. My alternative is to slowly pay off all the debt, the $7500 plus whatever we wind up owing on the lease (my guess is $2500-3500), with our current income it will take at least 2 years, and almost everything is already closed and sold to collectors. That will be better for our credit? I know bankruptcy is bad but I thought it couldn't get much lower than 423. I genuinely don't know what to do, I have some friends who filed and swear it saved them but I don't particularly LIKE the idea.
Submitted August 03, 2018 at 10:43PM by anxiousagnostic https://ift.tt/2OLgXgm
