Bankruptcy and Family Law
Bankruptcy and divorce separately are two of the most stressful events you can experience in your life. Having to go through them simultaneously is nearly unimaginable for most people. But there is a select group of the unlucky few who must deal with both of these issues at the same time.
If you’re in the midst of a divorce and you need to file for bankruptcy, or mid-bankruptcy your marriage ends, you aren’t the first to face these situations. Bankruptcy and family law attorneys deal with situations such as this all of the time. Knowing how to deal with these challenges when they occur simultaneously will make things go as smoothly as possible.
Timing of Divorce and Bankruptcy
If you suspect divorce is on the horizon and you’re also dealing with financial challenges, should you file for bankruptcy now or wait to see what happens with your marriage?
The first thing to understand is that if you are divorcing during bankruptcy, one will take precedence over the other from a legal standpoint. In most situations, bankruptcy cases are suspended while divorce issues are resolved. This allows a divorcing couple to sort out their marital debts and assets before bankruptcy court involvement.
This is good news.
Trying to juggle your divorce and bankruptcy at the same time is almost impossible. Most bankruptcy and family law attorneys recommend you file for divorce before you jump into bankruptcy proceedings. This isn’t the best solution for everyone, but most people fall into this category.
If you’re working with a divorce attorney and considering bankruptcy, he or she should be able to provide some advice regarding how to proceed. If you still aren’t sure, a bankruptcy attorney can help you decide.
Does It Ever Make Sense to File for Bankruptcy Before You End Your Marriage?
There are a few instances when filing for bankruptcy before divorce is smart. In some cases, doing so allows you to cancel joint marital debts. Some debts are divided in a divorce and tackled individually when each of you files for bankruptcy after divorce.
It might be a good idea to file for bankruptcy jointly, though, because it can make the divorce process easier. It also costs less and takes less time. There are also situations in which you get to keep more of our assets if you divorce first and then file for bankruptcy.
You and your bankruptcy and family law attorney can discuss the specifics of your situation.
How Bankruptcy Affects Spouses’ Credit Scores
One of the reasons people want to file for divorce before filing for bankruptcy is because they think it can protect their credit score or the credit score of their former spouse. Unfortunately, this isn’t always the case.
If you intend to separate your finances through divorce hoping that it will prevent bankruptcy issues from being any more damaging than they already are, you might find out this is impossible to achieve. The truth is filing for bankruptcy when you’re married, in the process of divorcing, or recently divorced, impacts both spouses. You can learn more about how filing for bankruptcy affects your credit score here.
Learn More about Bankruptcy and Family Law
If you have questions about divorce and filing for bankruptcy, we can help. Contact the Law Office of Robert M. Geller at 813-254-5696 to schedule a free consultation.