What Are The Benefits To Filing For Divorce Before Filing A Bankruptcy?
There are two main benefits to filing for a divorce before filing a bankruptcy:
The first is that you can file a joint case. Only married couples can file a joint bankruptcy case. You can file a bankruptcy together and discharge all your debts and then get divorced later. That would save you one filing fee.
The other main benefit if you own a house, is what they call Tenants by the Entireties, which is the way that only married people can own real estate. You may want to consider filing a bankruptcy before getting divorced because you can actually protect any equity you may have in the house from your creditors.
Once you get divorced, it’s no longer Tenants by the Entireties and any equity you have available on your house might now be available to your creditors. Therefore, it’s very important to talk with an experienced attorney before you make any decisions about getting divorced or filing a bankruptcy.
Will Filing Bankruptcy Before A Divorce Save Money In The Long Run?
Filing bankruptcy before you get divorced can definitely save you money because you can file a joint case. You’d file together and you have to go to one meeting of creditors and pay just one filing fee and one attorney fee. You do still have to be married in order to be able to file a joint bankruptcy case.
In Case You Want To File A Chapter 7 Bankruptcy, Should You Wait To File Until You’re A Single Household?
That’s another complicated decision. A lot of it may depend on your income and whether there are any children in your household. There are income limits on filing Chapter 7 Bankruptcy. In the event you are married, you obviously have two incomes most often. If get divorced, then you would have more expenses and less income, so you may be able to qualify for Chapter 7 where you wouldn’t qualify while you were married. That would be the main reason to consult an attorney to decide whether to file before or after getting divorced.
In A Divorce And Bankruptcy, What Is The Order You Should Take To Make Everything Flow Smoothly?
The problem is that you may have some conflict of interest between what’s best for the person who wants to file bankruptcy and what’s best for the person who wants to get divorced. If one person wants to file a bankruptcy and move on, that’s not necessarily in the best interest of the other party but it’s the job of their attorney to represent the best interest of their client.
If the person wants to file a bankruptcy and that harms the other party, then so be it. But if the parties are getting along, they may want to wait to file a bankruptcy for other reasons when dividing up the assets. There are a lot of different issues involving bankruptcy and divorce and it really just depends on the people are getting along and how much money we’re talking about in terms of assets, that are going to be divided.
Before you do anything, talk to an experienced bankruptcy and divorce attorney.
In a Bankruptcy And Divorce Case, The Question Arises Which Comes First? Call the law office of Attorney James Logan for a free initial consultation at (855) 4MD-BANK and get the information and legal answers you’re seeking.