Divorce or Bankruptcy? What to Do in This Scary Situation
It likely goes without saying that financial burdens and debt may be one of the top reasons couples choose to get divorced. Are you and your spouse divided over divorce and bankruptcy problems? Let Clark & Washington, the personal bankruptcy experts in the Southeast, answer all your questions about divorce and bankruptcy, including which should come first.
Making a Decision
Choosing between divorce and bankruptcy proceedings is a decision that should not be taken lightly. Three things get decided and sorted during a divorce, including property division, child custody and spousal/child support. Starting bankruptcy proceedings before you are officially divorced could delay the distribution of assets and liabilities until the bankruptcy is completed. So, how do you know if divorce or bankruptcy should come first?
Call Clark & Washington, the personal bankruptcy experts with more than 25 years experience.
Which Comes First?
If you and your spouse are on good terms, let a bankruptcy attorney guide you through the bankruptcy process, while putting your divorce temporarily on hold. All your debts can be jointly addressed in one case. In other words, you can wipe out your joint debts together, while increasing your exemption amounts. Should one spouse bring in all of the income, this will greatly increase their chances of qualifying for Chapter 7. Unsecured debts can be eliminated, and this process should take about 90 days to complete. If you choose to file Chapter 13, both parties would be responsible for the repayment plan, which could prevent the dividing of assets during the process.
However, if you are not on good terms and feel as if you should terminate the marriage first, filing for bankruptcy at the same time could delay the proceedings. This is because the distribution of assets and liability can be convoluted. Additionally, the court will treat your income differently depending on your marital status.However, if your divorce is filed and completed before you file for bankruptcy there are some benefits involved. These benefits include the ability to move assets from your name and it allows for support considerations.
Bankruptcy and divorce are two incredibly stressful situations for adults to go through. Consulting a bankruptcy attorney can help you decide what to do. Allow Clark & Washington to do the work for you.