Filing for divorce is a difficult process. Filing for bankruptcy during a divorce compounds the difficulty. Consult an attorney to weigh your options and determine a solution that’s best for all parties involved.
Bankruptcy During Divorce Issue #1 – Income
Timing is very important. If you and your partner are still legally married, you can file for joint bankruptcy. This will save you immensely in filing and legal fees. Keep in mind, though, that both incomes come into play. If your joint income is too high, you may not be eligible for Chapter 7 bankruptcy. If you suspect this is the case, then it may be beneficial to file after the divorce is finalized.
Chapter 7 is beneficial because the process can normally be completed within 90 days. Chapter 13, by contrast, can take up to several years especially if filed during divorce. Also, you both will be responsible for all repayment plans. You may also be unable to divide your assets to sell them.
Bankruptcy During Divorce Issue #2 – Debts
Filing for bankruptcy after divorce when you have existing joint debts can backfire. Creditors may try to recuperate payment from your ex-spouse. This may result in your former partner dragging you back to divorce court to get the court to order you to pay off the debt.
On a final note, it’s best that you try to remain on amicable terms during the process. The two of you will need to stay in contact and provide each other with necessary financial documents. Hopefully, you and your former spouse can do this directly and without going through your respective attorneys.
Seek Consultation
Bankruptcy in itself is an extremely complex process. It becomes even more complex if filed during a divorce. This is why you need to contact Curtis & Casteel Law Group to have a legal expert walk you through it. Aside from bankruptcy, we also help clients settle business and real estate matters. We have also helped clients file for bankruptcy during a divorce.
Edited by Justin Vorhees
Bankruptcy Consultation and Walk-Through
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