Two of the most devastating and overwhelming situations in life are bankruptcy and divorce. Unfortunately, many people who endure the one are also faced with the other. Filing bankruptcy can indicate financial difficulty, which is a leading cause of divorce. If you are fighting with your spouse about money, you are more likely to seek a divorce. Further, divorce can lead to financial difficulty as spouses attempt to separate assets, debts, and responsibilities. Divorce often directly causes a person to file bankruptcy.
If you are considering filing bankruptcy and divorce, you should consult with an experienced Dallas bankruptcy attorney. Allmand Law has worked with clients dealing with an array of personal situations. We can walk you through these difficult times and help you obtain financial security and move forward with life. Call us today at 214-884-4020 to find out what we can do for you.
Here are some things you should consider before you file for bankruptcy and divorce:
Don’t File for Bankruptcy and Divorce Simultaneously
Although you may be facing a difficult financial situation and be unhappy in your marriage, you should not file bankruptcy and divorce at the same time. Both courts will need financial income about you. So it can be difficult to know what information you need to provide to each court.
When you file bankruptcy, your assets and all legal actions against you are put into an automatic stay that halts creditor activity against you. You cannot dispose of those assets while you are in the bankruptcy process, so dividing property between spouses can be difficult.
Your debts, assets, income, and other financial information must be reported to the bankruptcy court. If you are going through a divorce, it can be difficult to determine what is yours and what belongs to your spouse.
If you file bankruptcy and divorce at the same time, your divorce may be delayed to wait on the outcome of the bankruptcy. This could result in a longer than necessary divorce process. This may, in turn, be emotionally taxing for you and your friends and family.
Chapter 7 Is Quicker Than Chapter 13
When facing bankruptcy and divorce, time is of the essence. You likely want to finish the bankruptcy process quickly so that you can move on to a divorce. It’s important to understand timelines so that you don’t extend the bankruptcy and divorce process unnecessarily.
Chapter 7 bankruptcy usually takes between four and six months from the date that you file your petition. However, Chapter 13 can take three to five years to complete a repayment plan. Thus, Chapter 7 may be an ideal option if you are also considering divorce.
Debts Associated With Your Divorce May Not Be Dischargeable
Bankruptcy may allow you to discharge many consumer debts; however, there are some types of debt that may not be completely eliminated through the bankruptcy process. Even if you go through bankruptcy and divorce, you cannot eliminate debt such as alimony, child support, and attorney fees for child custody or support cases. These divorce-related debts will remain and you will be responsible for paying them even after your bankruptcy.
You May Need a Different Attorney for Your Bankruptcy and Divorce
If you and your spouse filed bankruptcy together, you may need to find a new attorney to represent you through a divorce. Even if your lawyer handles bankruptcy and divorce, it may be a conflict of interest to represent you after they represented you and your spouse in a bankruptcy.
Contact Allmand Law to Learn More About Bankruptcy and Divorce
If you are facing a situation where you will have to file for bankruptcy and divorce, you should consult with a skilled lawyer right away. We will listen to your situation and help you determine if you should file bankruptcy or divorce first. Call Allmand Law today at 214-884-4020.