Chapter 13 Bankruptcy and Divorce
If you and your spouse filed Chapter 13 bankruptcy and now you are filing for divorce, there are a few options to consider depending on the situation. A divorce is known for affecting different things in your life including ownership of property and finances. It is likely your divorce will impact your bankruptcy case but it may depend on the unique situation of each spouse moving forward after the divorce is final.
Filing Bankruptcy as a Couple
When you file bankruptcy as a couple your filing is considered one case. Personal information about each spouse helps create one file. Some divorce cases may become challenging and outright nasty depending on issues involved. Many divorcing couples don't want anything to do with each other during and after divorce proceedings. So what happens to a bankruptcy case with spouses who are going through divorce? There are several possibilities to review to give an idea of what could happen.
Motion to Withdraw
It is possible the bankruptcy attorney would file a Motion to Withdraw due to conflict of interest. During Chapter 13 your bankruptcy attorney represents the couple, yet a divorce could be considered a conflict of interest. If the motion is filed each spouse would seek their own attorney to continue their case. Another possibility is to have your case bifurcated or split. This may happen if you and your spouse filed together to meet income qualifications for the Chapter 13 filing or you failed to pass the means test. So if your case is split you could qualify for a conversion to Chapter 7 bankruptcy depending on your income. You may even continue with your Chapter 13 bankruptcy individually if split into two cases.
Have Questions About Divorce and Bankruptcy?
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