Should You File Bankruptcy Before Or After You Divorce
A Chapter 7 or Chapter 13 bankruptcy can provide you with debt relief and a fresh start. However, the timing of bankruptcy is an important consideration. In some cases, it can make sense for a couple to file joint bankruptcy before divorcing. In others, you may be better off divorcing first and then filing bankruptcy. As a family law attorney who also practices bankruptcy law, Angela Trapp can advise you and take the necessary steps to help you get debt relief.
Effect Of Bankruptcy On Divorce Settlements
Lawyers for Alabama Residents Reorganizing Their Finances
It is not uncommon for bankruptcy and divorce to occur around the same time. Economic stress and debt often trigger discussions of divorce. Soon-to-be ex-spouses may be concerned about whether child support or alimony will be paid after bankruptcy is filed. They may be worried about who will pay for joint debts if one spouse files for bankruptcy. One or both spouses may wonder if a divorce settlement is enforceable once one spouse files for bankruptcy, which can have an effect on divorce settlements. At Grainger Legal Services, our Alabama bankruptcy attorneys can counsel people who intend to file before getting a divorce or who have already reached a divorce settlement.
The Effect of Bankruptcy on Divorce Settlements
When you file for bankruptcy, an automatic stay goes into effect and a bankruptcy estate is created. The estate will include all your non-exempt property. The automatic stay does not affect any aspect of your divorce except the division of bankruptcy estate property.
The divorce court cannot divide property that is already in a bankruptcy estate, whether that is the family home or stock or mutual funds. Thus, the division of property can be delayed by filing for bankruptcy, although custody, child support, and other family law issues may move forward. This can cause emotions to run high during the divorce proceedings, and the spouse not filing for bankruptcy may get frustrated.
A Final Word Of Advice
You should always be aware of all of your rights With regards to family law and bankruptcy If you are involved directly or indirectly in both, be careful about which legal process you choose to take care of first If, for example, you and your spouse are on amicable terms, it may be best to first file bankruptcy. If you and your former spouse can agree to file for bankruptcy together first then you can share the cost of attorney and filing fees which could protect you both from incurring debtIf you are going through a divorce With debt spiraling out of control, its time to contact the largest consumer bankruptcy filing firm in Florida We are here to make sure youre properly educated about bankruptcy and to help you build a strong financial foundation Call the Law Offices of Patrick L Cordero for a free consultation today at 445-4855.
Read Also: Trump Bankruptcy Filings
Bankruptcy During A Divorce
A married couple can file bankruptcy jointly or separately. A divorcing couple can file a joint bankruptcy case to eliminate marital debt. Getting rid of the debt prior to a divorce makes it easier to divide assets and liabilities. Bankruptcy wipes out your liability. Chapter 7 bankruptcy allows you to wipe the slate clean. If you have secured debt you want to keep, such as a home, you can file for chapter 13 bankruptcy protection to restructure debt. In chapter 13, you are required to make payments on your debt to the trustee. The terms of the debt are usually better, such as a lower interest rate. Both forms of bankruptcy have a severe impact on your credit score. Even if a bankruptcy case is dismissed, it appears on your credit report as soon as you file.
You Might Qualify For Chapter 7 After Your Divorce
If you and your spouse discussed filing bankruptcy before the divorce, you might have discovered that your income was too high for a Chapter 7 bankruptcy. However, after your divorce, you could qualify for a Chapter 7 case based on your income.
A Chapter 7 bankruptcy is a liquidation bankruptcy case. You do not enter a repayment plan for your debts. Any debts that are eligible for a discharge are eliminated when you complete the Chapter 7 case.
However, you could lose some of your property in Chapter 7 if you have assets with a high net value. A bankruptcy lawyer can review your property and advise you of any risk of losing property in Chapter 7.
Read Also: How Many Times Has Donald Trump Been Bankrupted
North Carolina Divorce Attorneys
If you have any questions about filing for divorce before a divorce, or waiting until after a divorce to file for bankruptcy, contact the Caulder & Valentine Law Firm, PLLC. Contact us online or by phone at 704-470-2440 today for a consultation.
Thank you for contacting us. We will get back to you shortly.
Please complete all required fields below.
Indianapolis Bankruptcy & Divorce Attorney
Financial problems are often a contributing factor in divorce. They can also arise after the divorce when a divorced person must support a household on one income rather than two.
At Trapp Law, LLC, our Indianapolis family law lawyers have solutions for people who are dealing with financial problems caused by unmanageable debts. If you intend to get a divorce, we can represent you during the process, to protect your rights and prevent you from getting saddled with an unfair portion of marital debts. We also provide debt relief solutions through Chapter 7 and Chapter 13 bankruptcy proceedings.
If you have debts that are out of control, contact us today. Indianapolis divorce attorney Angela Trapp can review your case and discuss possible solutions with you.
Don’t Miss: Student Loans Attorney In Columbia Mo
Should I File For Bankruptcy During A Divorce
Generally this course of action should be avoided. A divorce can be prolonged by many of the legal procedures of the bankruptcy. A family court cannot divide up assets like land and vehicles when they become the property of the bankruptcy estate.
This effectively drags the divorce proceedings out until after the bankruptcy is settled. Conversely, a bankruptcy case can be prolonged by unresolved divorce proceedings such as child support or alimony.
If you are in the Philadelphia area and are struggling with how to best approach bankruptcy, call the Law Offices of David M. Offen at 625-9600 to schedule a free consultation. With over 20 years of practice in bankruptcy law, Mr. Offen has helped over 10,000 clients navigate their financial troubles successfully. to a better financial life.
Can I File For Bankruptcy If I Am Going Through A Divorce In Ohio
Many people who are having financial problems and facing the end of their marriage are wondering whether they can file for divorce and bankruptcy at the same time. You can file for bankruptcy during the time that you are going through a divorce. However, it is important to note that you could complicate things by filing for bankruptcy during the same time that you file for divorce.
All of the property that you own becomes the bankruptcy estates property when you file for bankruptcy. The judge will not be able to divide or distribute the assets until after the bankruptcy has been completed. As a result, you can expect the divorce process to take longer if you are going through bankruptcy at the same time.
It is not wise to file for bankruptcy and divorce at the same time. You may be wondering whether it is better for you to file for divorce or bankruptcy first. In most cases, it is best to file for bankruptcy first. You and your spouse will be able to eliminate joint debts together. The divorce will be able to move forward without delays because of bankruptcy.
If you file for Chapter 7 Bankruptcy, then you will probably be able to complete the process within four months. You and your spouse will not have to worry about fighting over unsecured debt because it will be eliminated. Keep in mind that if you file for Chapter 13 Bankruptcy, then you and your spouse will both have to make repayments.
Read Also: How To Become A Bankruptcy Petition Preparer
Types Of Personal Bankruptcy In Nevada
You may be eligible to file for bankruptcy in Nevada under chapter 7, also known as straight bankruptcy, or chapter 13, known as reorganization bankruptcy. Chapter 7 entails the liquidation of your assets in exchange for the elimination of your debt. In general, under federal bankruptcy law, filers are entitled to keep certain exempt property such as a home and vehicle. Under chapter 13, your debts are reorganized, and you are required to pay off a specified amount of your debt over a three- to five-year period.
Objecting To Confirmation / Motion To Dismiss / Proof Of Claim
In a Chapter 13, the debtor must propose a plan and the plan must be confirmed by order of the Court. The plan must propose to pay back any DSO arrearage in full and must list the DSO as a priority unsecured debt . If the debtor spouse fails to properly list or account for the debts owed to the non-filing spouse, then the non-filing spouse should file an objection to the confirmation of the plan.
Additionally, if the sole purpose of the filing of the bankruptcy was to frustrate the collection of the amounts owed to the non-filing spouse, then a Motion to Dismiss for a bad-faith filing should be considered. See In re Ellis, 406 B.R. 736
Lastly, the non-filing spouse should file a proper proof of claim to ensure that they are paid and have not waived any claim to any amounts that they are owed.
Read Also: How To Buy A Car After Bankruptcy
Talk To A Bankruptcy Attorney
There are many areas where bankruptcy law and family law can overlap. In some circumstances, filing for bankruptcy during your divorce can cause unnecessary delays or complications. If you have an ongoing divorce case, talk to a knowledgeable bankruptcy attorney in your area to learn about how filing for bankruptcy might affect your pending divorce.
What Happens To Personal Assets If You File For Bankruptcy While Getting A Divorce
What happens to unsecured assets in the case of both a bankruptcy and divorce, depends on which process occurs first, and who has rights to the assets at that time.
If bankruptcy first:
If someone files for bankruptcy first, their assets are transferred to their bankruptcy estate and are no longer available for distribution to their ex-spouse.
If separation or divorce first:
If assets are transferred to an ex-spouse as part of as part of the divorce agreement or legal separation agreement before the person files for bankruptcy then those assets are no longer available to creditors in the bankruptcy.
Read Also: File Bankruptcy In Ohio
Seeking Legal Counsel Regarding Bankruptcy During Divorce In Nevada
Divorce and bankruptcy are complex, especially when filed together. Because of the many complications that bankruptcy can bring to a divorce, the prudent course of action may be to consult with an experienced Las Vegas divorce attorney. If the prospect of divorce and bankruptcy looms in your future, call RIGHT Lawyers at 832-4176 for an initial consultation or contact us today.
Can Couples File Bankruptcy Together After Divorce
Divorced couples are still allowed to file a joint consumer proposal or joint bankruptcy to get relief from their combined debts. It is not uncommon for separated couples to find themselves no longer able to repay debts they could manage while married. Divorce changed their financial circumstances. Divorce costs can lead to divorce debt and operating two homes can significantly reduce the amount of monthly income available to repay old marital or joint debts.
To determine whether a joint consumer proposal or bankruptcy is the best way to go, both spouses should contact a Licensed Insolvency Trustee to get an assessment of their individual financial obligations.
If you need to file for divorce and bankruptcy, it is very important to talk to a divorce attorney and a Licensed Insolvency Trustee before filing for either one. The decision as to whether to file bankruptcy or divorce first should be made based on whats best for you at the time. If you need further advice about the timing of your bankruptcy vs your divorce, contact us for a free consultation. Were here to help.
You May Like: Toygaroo Worst Deal
What Happens When One Spouse Files Bankruptcy Without The Other Spouse
There is no requirement that a husband and wife jointly file bankruptcy. If most debts are owed only by one spouse, it may be appropriate for that spouse to file for bankruptcy alone. However, if one spouse does file for bankruptcy in order to discharge debts, the other spouse may be held responsible for repayment of some debts, such as jointly-owned credit card debt or medical debt. This is a difficult and tricky legal situation to navigate, and it is in your best interest to contact a knowledgeable bankruptcy attorney in order to determine what each person’s liability will be.
If the indebted spouse has most of the debt in his or her name alone, joint filing may not be the best option. The other spouse is not responsible for paying off the debt. Also, it may be the case that the spouse who is not in debt has numerous protected assets or may stand to inherit a great deal of money. In that situation, a joint filing may not be advisable.
A joint bankruptcy filing may be the best option if the non-insolvent spouse has few resources or has all his or her assets intermingled with the filing spouse. Filing jointly avoids unpleasant situations where the creditors attempt to reclaim the filing spouse’s debts by going after the non-filing spouse’s assets. Filing jointly for bankruptcy often affords couples a more simple financial transition.
It is in your best interest to discuss your choices with an experienced bankruptcy attorney in order to determine what your best options are.
Joint Or Cosigned Credit Obligations
If your ex-spouse files for bankruptcy, you will be responsible for the debt if you are a joint owner or cosigner. The lender can require you, as a joint owner or cosigner, to make payments on a loan if your ex-spouse declares bankruptcy on the credit.
Unfortunately, the creditors dont care what your divorce agreement stated, says Justin Harelik of Bankrate.com. You are still responsible to pay on this debt even if your fails to pay. The divorce agreement does not wipe out your responsibility to pay, only that you can force another person to do so.
Be prepared to pay the loan in the event that your ex-spouse stops paying or is discharged from the obligation to pay the debt through bankruptcy. Contact your divorce attorney to discuss your legal options.
Addressing these things will help you be proactive in protecting your financial stability.
If your personal finances are suffering due to your divorce, you dont have to struggle alone. We can connect you with a Bankruptcy Attorney in your area to provide a free consultation.
Bankruptcy certificates are required for your debts to be discharged by bankruptcy. We provide pre-filing , as well as post-filing debtor education to assist you in the process.
You May Like: How Many Times Did Donald Trump Filed For Bankruptcy
Divorce During Chapter 13 Bankruptcy
If a Chapter 13 bankruptcy has already been filed, getting divorced during the bankruptcy proceedings will also affect your case.
For example, if you own a home, whether youâre filing for Chapter 13 or Chapter 7, a divorce may affect any equity you have in your home. Equity is the difference between the value of your house minus what you owe. Depending on the state you live in, some or all of the equity in your home may be protected as a married couple. However, if you move out of the marital home or file for divorce during the bankruptcy, that bankruptcy exemption may be lost. If the marital home is going to be sold, your share of the equity after the sale of your home is complete is likely not protected. The bankruptcy trustee will use the money to pay back your creditors.
Bankruptcy And Divorce Costs
Bankruptcy filing fees are the same for joint and individual filings. So filing a joint bankruptcy with your spouse before a divorce can save you a lot of legal fees. Also, if you decide to hire a bankruptcy attorney, your attorney fees will likely be much lower for a joint bankruptcy than if each of you filed separately. However, you should let your bankruptcy attorney know about your upcoming divorce as there may be a conflict of interest for him or her to represent you both.
Filing for bankruptcy before a divorce can also simplify the issues regarding debt and property division and lower your divorce costs as a result.
Recommended Reading: Filing Bankruptcy California
A Guide To Divorce Before During And After Bankruptcy
- 15th July 2019
- Bankruptcy, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy
Divorce. Most American couples swear till death do us part, but over 40% will eventually decide to break their vows. Divorce is a messy business, often in the literal sense. Most couples finances are intimately entangled, including a great deal of shared debts incurred with the assumption of two incomes.
Messy finances can be a stress leading to divorce, and trying to maintain the spending of a marital lifestyle after divorce can lead to rapidly mounting debt. This guide will explain what role bankruptcy can play to resolve a personal financial crises leading to or stemming from a divorce.
This guide is written for educational purposes only. It is not a substitute for personal legal counsel and reading it does not create an attorney-client relationship with The Law Offices of David M. Offen. If you do have questions about filing bankruptcy, call David M. Offen at 625-9600 to get answers or schedule a consultation with him