It is definitely not a great feeling to go through a personal crisis of bankruptcy and divorce at the same time. There can be a tight interlink between the two, as divorce can lead to a bankruptcy situation as assets may get separated and also if you are turning bankrupt as a married couple, you are definitely turning unhappy with your partner leading to a divorce. Despite this link, it generally isn’t a great and wise idea to file for divorce and bankruptcy at the same time. Let’s learn how!
- As the court may request financial income information about the partners when filing for bankruptcy, it will be difficult to identify the needed information to be furnished in the court. The same applies to share of financial information to the family court related to your divorce
- Filing for bankruptcy will halt all legal actions against you and your assets. Hence it will be difficult to divide the properties between the partners and selling of the same will be quite impossible too
- Declaring all of your assets, debts, income and financial information is a mandatory process to be followed while filing for bankruptcy.
- If you are struggling in a divorce scenario, it becomes a herculean ordeal to determine who owns what!
- If you have applied for divorce at the same time as your bankruptcy, the divorce may get delayed in order to see the outcome of the bankruptcy filing case. A longer divorce journey can be emotionally draining for both the partners along with their family
How can you mitigate the scenario of separation and divorce?
There are some ways to handle this situation of filing for bankruptcy and also seeking a divorce. Here is one of it –
- File for a Chapter 7 bankruptcy instead of Chapter 13 as the process is generally quicker with Chapter 7.
- The ideal time of completion is between four and six months when opted for Chapter 7 and it can take up to five years in the case of Chapter 13 (as this involves a repayment plan).
Hence you can get over with a Chapter 7 bankruptcy case in about half of a year and then move on to seeking the divorce.
Some key points to remember
When dealing with bankruptcy and divorce, here are some key points to remember
- Some debts associated with divorce cannot be discharged when you file for bankruptcy. Debts such as alimony, child support and attorney fees for cases related to child custody fall under this category. They continue to remain after your bankruptcy too and the debtor needs to ensure that they are repaid
- Handling of the bankruptcy cases and divorce case needs to be delegated to different attorneys in order to avoid conflicts of interest.
- If as a debtor and a married person, you find yourself in a situation of handling bankruptcy and a divorce case, get the expert assistance from law firms such as the Recovery Law Group. They deal with your cases with their skilled experience of handling several clients in the past.