Bankruptcy is a legal procedure in which a person who is not able to pay debt seeks relief in court. There are many chapters under which a petition can be filed. The liquidation chapter allows the debtor to have the assets on his name to be sold in order to pay off pending debts.
Chapter 13 allows the debtor to keep the assets but continue payments from the monthly income they get. Bankruptcy may affect the spouse of the debtor and the entire family as well. Insolvency affects spouses in many ways including mental torture. When a partner files a petition, many go around wondering what their neighbors will think of them.
They worry about their friends knowing about the situation and how they will take the news of the bankruptcy. This will mostly happen with people who claim a high social life. Insolvency affects a spouse at times to the extent of becoming depressed and withdrawn. Another way in which it affects spouse is when one of the partners files a petition and part of the property they hold together is lost in the process.
Sometimes creditors may continue to press charges to have the assets liquidated which may cause great problems for both. It is normally fair that only the partner who has debts and is not in a position to pay files the petition than dragging the other party into it. It is quite unfair for a debtor to harass a partner who has no debts at all.
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