Not everyone knows that bankruptcy and divorce can go together. This choice can be challenging and have a major influence on your financial resources going forward. In this article we will certainly review points to consider when deciding whether to file bankruptcy or divorce first.
Divorce and Bankruptcy: How do they influence each other?
Generally speaking, undergoing the bankruptcy process should take priority over filing for divorce. If you were to file for personal bankruptcy while the separation process was currently underway, it would greatly delay things and make it impossible for the divorce to go through. By filing for personal bankruptcy ahead of the divorce, the distribution of liabilities as well as assets can effectively be completed without bankruptcy obstacles blocking your course.
Most individuals would certainly like to get a divorce and also file personal bankruptcy at the very same time. Unfortunately, as a result of the information that we shared with you, you now know that this is impossible to accomplish. Considering that bankruptcy has a straight effect on a person’s financial obligation, this will certainly impact the way your debts will be handled during the divorce proceedings.
What’s more, the bankruptcy court can treat your income differently depending on your marriage status – whether you are divorced, separated, or currently married.
Bankruptcy goes first.
Are you still on excellent terms with your partner? If so, then declaring bankruptcy before divorce is the most effective possible solution for all events included. You can submit together as this permits all of your current debt to be addressed as one bankruptcy situation. Basically, by filing jointly, you may also increase your exemption amounts.
If one spouse is the breadwinner, it gives that partner a far better opportunity of qualifying for Chapter 7 bankruptcy.
Qualifying for Chapter 7 is very important because it helps to get through the procedure quickly. Actually, the whole bankruptcy will certainly be over and finished within 90 days. By going this route, you and also your partner will have the possibility to eliminate all your unprotected financial obligation. As opposed to having this huge problem hanging over your head during the divorce process, there will be nothing left to fight over as far as unsecured debt is concerned.
Filing for Chapter 13, on the other hand, will certainly make both parties responsible complete their repayment plan. This can cause further issues throughout a divorce and even stop the division of property by sale.
As soon as bankruptcy is finished, you could initiate a divorce with no further hold-up.
When Should I Declare Divorce First?
It can make sense to file for divorce initially in certain scenarios. For example, when the marital earnings levels are so high that you will certainly not receive admission to Chapter 7 bankruptcy.
In case, if you earn less compared to your spouse, you may be able to get approved for Chapter 7. This way, you’ll have the ability to you’ll be able to eliminate all of your debt without filing Chapter 13 bankruptcy.
Altogether, deciding to file for divorce before bankruptcy need to be based upon your personal situation. In many cases, applying for bankruptcy jointly with your partner is the most effective option for everybody entailed. That’s why, the best way to make a right choice is to contact our recognized Chattanooga attorney for a free consultation.