It’s common knowledge that money issues often lead to divorce, so it’s not surprising that bankruptcy may be looming while couples are splitting up, whether for one spouse or both. If you and your spouse know that you both need to file, the process will be more affordable and expedient if you work together. It will also be easier if you file together before divorce, taking advantage of a discounted fee for filing jointly, along with enjoying the possibility of more exemptions. Further, by filing jointly before the divorce couples can eliminate the marital debt and simplify the property division in the divorce.
While communication is often not good between divorcing couples, if you are planning to file for Chapter 7, waiting out the three to six months to have your debts discharged might not be so difficult. However, if you both plan to file for Chapter 13, this merits some consideration as completing the repayment plan will take three to five years. If you are in a moderate hurry to file for divorce, Chapter 13 may be one of the things you want to handle separately later.
A major concern in filing bankruptcy during divorce is that the automatic stay will immediately bring any property division to a halt, and it will remain so for the duration. That could be highly inconvenient for both parties, and is an excellent reason to cooperate. If one party files by themselves during bankruptcy, the same problem will occur. Both your divorce and your bankruptcy may become far more complicated than necessary if you can’t coordinate ahead of time.
It’s also important to note that filing for bankruptcy will not relieve either party of any responsibility for family support payments. The automatic stay will not have any effect on child support, alimony or custody issues either. For more information on that subject, see our recent blog, ‘What Happens to My Child Support Obligation in a Bankruptcy Case?.
The experienced attorneys at Levitt & Slafkes, P.C. can answer all your questions regarding bankruptcy issues. Contact us today so one of our attorneys can evaluate your case and discuss the best options available to you. We are here to help!