What To Consider When It Comes To Bankruptcy And Divorce
Are you currently considering both bankruptcy and divorce? When you are dealing with financial stressors and marital problems, it can be difficult to know how you should proceed. More specifically, you may be wondering if you should be filing for bankruptcy and then considering divorce later on, or whether it might make more sense to get divorced before you begin addressing your financial circumstances and the possibility of a bankruptcy case. It is critical to know that there is no single “right” way to handle individual circumstances involving plans for both bankruptcy and divorce. Rather, it will be essential to develop a plan that is tailored to your particular circumstances and needs. While you should get in touch with a lawyer before making any plans, the following are some important considerations when it comes to bankruptcy and divorce.
Type of Bankruptcy Will Be Important
The type of bankruptcy you are considering will be essential to determine before you move forward with a bankruptcy filing or a divorce filing. Why is the type of bankruptcy important to determine first? In short, the type of bankruptcy filing you are planning on will likely impact the order in which you file for bankruptcy and divorce — with some types of bankruptcy, it will be important to file for bankruptcy before your divorce, while other types of bankruptcy are more suited to a post-divorce situation.
Generally speaking, if you are planning to file for Chapter 7 bankruptcy, it is typically a good idea (although you should discuss this with a bankruptcy attorney) to file for bankruptcy before you file for your divorce. Then, in your divorce case, there will be fewer assets and liabilities to distribute between you and your spouse, and your divorce case will likely take less time and money. With a Chapter 13 bankruptcy case, you need to plan on a repayment period of three to five years. If you are planning to end your marriage, you probably do not want to be involved in a lengthy repayment plan with your ex, and a Chapter 13 case for just one spouse can significantly complicate a divorce case. Accordingly, it is often better to file for Chapter 13 bankruptcy after your divorce is finalized.
Details of Your Debts Will Be Essential
What types of debts do you have, and are they shared with your spouse? A bankruptcy case can significantly impact a divorce case when assets and debts are considered to be marital property (i.e., property owned by both spouses).
In addition, if many of your debts and assets are considered to be marital property, does your spouse plan to file for bankruptcy, as well? The answer to this question can be critical to consider when you are trying to determine whether to file for bankruptcy before or after your divorce. In general, if both you and your spouse plan to file, and you plan to file for Chapter 7 bankruptcy, you will likely want to receive a discharge before you go through a divorce.
Contact a Bankruptcy Attorney in West Palm Beach
When you are considering both bankruptcy and divorce, it is essential to get in touch with a lawyer who can help you to determine the implications of each type of filing and the appropriate order for your bankruptcy and divorce cases. As we have discussed above, depending upon your particular circumstances, it could make more sense to file for bankruptcy before your divorce case, or you may want to go through with your divorce before you file for bankruptcy. An experienced West Palm Beach bankruptcy attorney at Kelley Kaplan & Eller can speak with you today about your situation and your options.