American Legal System
Going through a divorce is stressful enough as it is. If you have to file for bankruptcy, it could make your life eve more hectic. Finances are commonly affected during divorce, so more people than you think file for bankruptcy at this time. If you and your ex are considering filing for bankruptcy, here are some things that you should know.
You Shouldn’t File for Divorce and Bankruptcy at the Same Time
Divorce and bankruptcy are both complicated legal processes, so you should never file them at the same time. It might make things too confusing. Whether you file for divorce or bankruptcy first depends on your unique situation. For example, if you and your ex are on amicable terms, it’s best to file for bankruptcy first. If you file for bankruptcy together, all of your debts will be taken care of together. You may be able to increase your exemption amounts and get rid of assets neither of you wants anymore, like a mortgage that’s underwater.
On the other hand, if your joint income is too high to qualify for Chapter 7 bankruptcy, it may be better to file for bankruptcy after you get divorced. If you make a lot less than your ex, you may be able to qualify for Chapter 7 and get rid of your debts easier.
Chapter 7 Can Help You File for Divorce Sooner
If you want to get your divorce over with as quickly as possible, it may be in your best interest to file for Chapter 7 bankruptcy. This type of bankruptcy eliminates all your dischargeable debts and typically takes just three to six months. Chapter 13 bankruptcy, however, sets you up on a payment plan to repay your debts. This payment plan can be anywhere from three to five years and could prolong the divorce process.
Understand That You Can’t Discharge All Debts
While things like credit card debt and medical bills can be discharged in Chapter 7 bankruptcy, nondischargeable debts can’t be forgiven. These include student loans, child support and fines owed to government agencies. If you have any of these types of debts, it’s important to plan out how you will pay for them.
Should You Hire a Bankruptcy Lawyer?
Whether you decide to file for bankruptcy before or after your divorce, it’s in your best interest to hire an experienced bankruptcy lawyer. Bankruptcy is a complicated manner and you want someone with knowledge and experience on your side. Paying for a bankruptcy lawyer might seem daunting on top of your divorce legal fees. However, he or she will simplify the process for you and reduce your stress. Your bankruptcy lawyer will explain the process to you, inform you of all your options and prevent you from making the wrong decisions.
Schedule a consultation with a qualified bankruptcy lawyer today. The sooner you get the process started, the sooner you can get on with the rest of your life.