Disclose finances to spouse to avoid debt, bankruptcy

Disclose finances to spouse to avoid debt, bankruptcy

When Arizona husbands mislead their wives about their spending habits, they may be hiding the fact that they spent excess money on entertainment, power tools, guns and sometimes cars. Today.com and Self.com discovered the astonishing fact that 37 percent of the approximately 23,000 men and women lie about money to their partner.

In addition to this, 32 percent of women and 17 percent of men claimed they had hidden their purchases from their significant other. Even though hiding a trip to the salon may not seem significant at the time, small things add up and may cause financial difficulties, as both parties do not disclose their actual spending. With each partner struggling with getting their own finances under control, their combined debt may come as a surprise and may end up with a bankruptcy filing, either Chapter 13 or 7.

Chapter 13 bankruptcy differs from 7 in that to qualify for Chapter 7, Arizona residents have to pass a means test. Chapter 13 may be more suitable for filers earning a regular income and able to pay some bills, just not all of them-for them, the court draws up a repayment plan based on their income and they pay back their bills on the new terms. It allows filers to regain control of their financial life slowly but surely.

Even though most couples value honesty and specifically honesty in financial matters, the numbers indicates an alarming rate of dishonesty. One way couples can keep each other in check is by creating a joint account so both parties make deposits in the account and both can keep an eye on purchases and help each other control their financial habits.

Despite all precautions, it is understandable that Arizona residents may be struggling with their finances right after the holiday season. Those with overwhelming debt may be able to file for Chapter 13 bankruptcy to start the new year with a new financial record.

Source: The Tennessean, "Hiding expenses could signal deeper issues," Jere Downs, Jan. 2, 2013

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