Are you thinking of filing for bankruptcy and you are in the process of getting a divorce? If both of these things are going in parallel, then the timing can be very critical and it important for you to evaluate your options. Often times money problems can lead to excessive stress, anxiety, and worry, especially when you are in a marital relationship. Even if prior to the financial problems, your marriage was going well, the best marriages also succumb to financial problems. This is the very main reason why so many couples file for a bankruptcy shortly before or after they get a divorce. It is important to contact your local attorney who can discuss with you the options that are available to you. The article below is written for educational purposes and should only be treated as such. This article will discuss how the bankruptcy filing and divorce filing can be handled simultaneously.
Filing for Divorce and Bankruptcy
Generally, bankruptcy which is federal law takes precedence over a divorce case, which is under Georgia state law. If you file for bankruptcy when you are in the process of getting a divorce, you may not receive your assets and liabilities until bankruptcy is completed. This simply means that you must finish your bankruptcy filing first prior to getting a divorce. In a way there is no possible way to file for divorce and bankruptcy simultaneously. Additionally, bankruptcy looks at debts, which are tied to one’s name or social security number. Thus, it can after the way debts are treated during divorce. Lastly, bankruptcy courts are likely to treat your income differently depending on your marital status at the time the case is filed.
Choosing the Correct Chapter of Bankruptcy
One of the biggest factors in determining when to file for the bankruptcy is on the basis of the type of bankruptcy you are interested in filing for. If you are filing under a Chapter 7 bankruptcy, then it is recommended that you file prior to divorce, as this is the best option. Due to the ease of filing for bankruptcy under Chapter 7, there is no reason why you and your spouse cannot file it jointly, discharge the debts, and then file for divorce afterwards. Further, if you decide to file under Chapter 7, the process may take only several months. On the contrary, if you decide to file for a Chapter 13 bankruptcy, it may not be a good idea to file prior to divorce as this type of bankruptcy lasts 3-5 years. If you are planning to divorce within this time frame, you will have to go through the process of having the bankruptcy case separated or closed once the marriage is officially ended.
Reasons You May Decide to File Bankruptcy First
If you and your spouse are on decent terms, then it would be in your best interest to consider a bankruptcy prior to divorce. By doing a joint petition, all the debts will be addressed under one bankruptcy matter. You will be able to wipe out your joint debts and will likely be able to increase your exemption amount. If your spouse makes all the money, then you will likely be qualified for a Chapter 7 for that spouse. By filing for bankruptcy, you will be able to eliminate the contracts that neither of you are interested in keeping, such as the car loans that are too costly nor house mortgage that is completely underwater. If you are qualified to file for Chapter 7 bankruptcy, then you should complete the filing within 90 days. As a result, you and your spouse can eliminate the unsecured debt.
On the other hand, if you and your spouse decide to file for bankruptcy under Chapter 13, then you both will be responsible for the repayment plan. You may however will not be able to divide the assets by sale. Once the bankruptcy filing is completed, and then the divorce proceeding will proceed without any further delays.
Reasons Why you May Decide to File for Divorce First
If you and your spouse’s joint income is too high to qualify for Chapter 7 bankruptcy. If you make significantly less than your spouse, then you can likely qualify to file for Chapter 7 to get rid of the debt in your name without a Chapter 13 payment plan. In some cases however, after a divorce, both spouses can qualify for Chapter 7 bankruptcy individually, even if they could not do it jointly.
If you plan properly, then you may also be able to move certain assets outside of the trustee’s influence. For instance, if one spouse receives the house during divorce proceeding, a proper judgment with the proper transfer of the title/mortgage can protect the ex-spouse from creditors. Additionally, by divorcing first, you will be able to consider support. If you still owe a lot of spousal support, then knowing the amount before the bankruptcy will be helpful. Specifically, the support can affect how your bankruptcy will proceed. Nothing can get worse than having a bankruptcy repayment plan based on income that is inaccessible.
Collecting from your spouse sounds much easier than it really is. In reality, it usually means pursuing your spouse in the court. Due to this, it may be in both spouse’s best interest to file for bankruptcy and wipe out there joint debts before filing for divorce. Choosing to file for bankruptcy before divorce means that you can gain a financial fresh start without having marital debts looming over your head. If you are unsure about filing for divorce and bankruptcy, it is generally advised to consult your local attorney today who is experienced in helping people with similar legal matters as yours.
Getting Help from an Experienced Divorce and Bankruptcy Attorney
Going through a divorce is already very stressful, and then to think about adding bankruptcy on top of that doesn’t make things any easier either. However, the experienced divorce and bankruptcy attorneys at Coleman Legal Group, LLC can help. Our attorneys can help you decide what is the right course of action as to whether you should file for bankruptcy or divorce first. Call us today at 770-609-1247 today to get your case started. Contact >>