HOW DOES DIVORCE AFFECT my bankruptcy filing?
Divorce can be an intense and stressful process, even in the best of circumstances. But if you are struggling with debt, the process can be made so much worse. Many people lose assets and suffer serious financial setbacks because of a divorce. They have to learn how to go from living on two incomes to just one. If you already have debt before then, divorce can make your financial situation worse.
If you are going through a divorce, you may start thinking about filing for bankruptcy as a way to manage your overwhelming debt. But you will need to talk to a Gilbert experienced bankruptcy attorney to learn more about your options. Depending on your personal circumstances, it may be better to file for bankruptcy before your divorce is finalized, or it may be better to file afterward. The laws are complex, so you need to consult with an experienced lawyer to understand how they apply to your particular circumstances.
bankruptcy filing before the Divorce
You may have accumulated a lot of debts during your marriage, or your spouse may have accumulated a lot of debts independently of you. Debts will be divided between the two spouses in the divorce, just like assets will be. If you want to avoid taking on more debt from your soon-to-be ex, you may want to file for bankruptcy before the divorce is final.
Know that if you file for bankruptcy while you are still legally married, your spouse’s income will be considered in addition to your own. Therefore, you may not qualify for Chapter 7 bankruptcy, which provides a total discharge of unsecured debts, but which also has strict income requirements.
Filing after the Divorce: A clearer picture of your estate
It may be better for you to file for bankruptcy after your divorce because everything will be settled with the division of your debts and assets, and you will likely have a lower income. You will have a clearer picture of your estate, and you will be more likely to qualify for Chapter 7 bankruptcy.
After the divorce, you will also have a confirmed order for spousal support or child support. If you have to pay a lot to spousal support or child support, that may significantly reduce your disposable income, which may make it easier for you to qualify for Chapter 7 bankruptcy.
should i file for bankruptcy and divorce at the same time?
You can simultaneously file for bankruptcy and file for divorce at the same time. However, doing so will make both your bankruptcy and your divorce more complex, and it could delay the resolution for each. You cannot move forward on your bankruptcy filing without a clear picture of your finances, which means you need a resolution for the division of assets and debts. You also cannot get a clear division of assets and debts if some of your debts are currently under review to be discharged in bankruptcy or some of your assets are currently under review to be liquidated to pay off debts.
If you insist on filing for bankruptcy and divorce simultaneously, just make sure you work with a good Gilbert bankruptcy attorney and a good divorce attorney to guide you through the process. They’ll advise you on strategies to move through the process more quickly while also protecting your interests.
No matter what strategy you decide – filing for bankruptcy before or after your divorce, or even simultaneously – it is important that you work with an experienced bankruptcy lawyer on the process. Your attorney will ensure that your filing is complete and accurate, and your lawyer will advise you on the best steps to take throughout the process to ensure a timely discharge and the maximum debt relief.
Contact Experienced Bankruptcy lawyers in gilbert
Gilbert Bankruptcy Lawyers are ready to help you get the debt relief you need through bankruptcy protection. We can help you understand the best steps to take if you are in the process of divorcing or know you will be soon. We’ll carefully review your finances and make tailored recommendations for how to use bankruptcy most effectively to meet your goals, including discharging as much debt as possible and protecting as many assets as possible. Call us in Gilbert today to schedule a free consultation with a bankruptcy attorney.