Wednesday, November 9, 2016
Should I File For Divorce Or Bankruptcy First?
A lot of time marital trouble and financial distress go hand in hand. After all, they say the number one cause of divorce is money problems. But what do you do if you need to file for divorce, and file for bankruptcy? How do you know which one of these legal matters to tackle first, and how can you be sure that both cases go off smoothly?
In addition to wanting your divorce case and your bankruptcy case to be trouble free, you will also want to know if your bankruptcy case will have any impact on your divorce and vice versa. The decision on whether to file for bankruptcy or divorce first can be made by examining the following factors:
• Are you and your spouse currently being sued for any past due debts? If so, have you made a plan for repayment of these debts and who will bear most of the responsibility for that repayment? If you are not the main wage earner and your spouse is contributing to the majority of your financial load, the timing of both cases is critical. On the one hand you might get the benefit of having some debt cleared before you are single again, but on the other if you rely on your spouse during times of marital struggle; you may be left holding the bag for the debt if that is what the family law court decides.
• Is most of your debt in your name, your spouse’s name, or held jointly? Debts that are solely in your spouse’s name will not be listed in your bankruptcy, and you will not have to repay loans you did not request.
• Do you have kids, and if so how will their support be provided once you are divorced? Child support is not a debt you can eliminate in bankruptcy, so if your intentions are to get divorced first and then have the bankruptcy court modify any child support order, you will be disappointed.
• Will you need your spouse to contribute to your support after the divorce?
• Are you being foreclosed on, and will there be a deficiency amount still due after the foreclosure is over? Your mortgage lender has the ability to ask that both you and your spouse pay the deficient amount after a foreclosure, but if you file bankruptcy you ca absolve yourself of this obligation. Filing bankruptcy before divorce, in this instance, could help you avoid a potentially large judgment being taken against you.
The answers to the above questions are vital when trying to develop a legal plan that fits your needs. Each case is different, and we can help you make a decision that will work. Call us today for more information, and out how divorce and bankruptcy actions interact.
For help with bankruptcy, call us today or reach us online at www.law-ri.com. We have multiple locations to serve you and can schedule a time to meet at the office most convenient for you.