Divorce and Bankruptcy
Financial problems many times represent issues that contribute to the failure of a marriage. Financial issues oftentimes are front and center in divorce proceedings. There are instances in which a couple decides to divorce and have very serious financial issues. Indeed, these financial problems are so significant, bankruptcy may represent the best course of action for a couple in certain circumstances. There are some basic facts a person needs to bear in mind when contemplating the prospect of divorce and bankruptcy.
Divorce and Bankruptcy: Don’t Put the Cart Before the Horse
A common impulse among some couples facing the prospect of divorce and bankruptcy is to get out of the marriage and deal with the prospect of bankruptcy at a later date. In the majority of cases, this is not the strategy to employ. In fact, a couple usually will want to pursue and finalize a bankruptcy before obtaining a final decree of divorce. Taking this course conserves resources and ensures that both parties obtain the full level of relief available through the bankruptcy court.
Divorce and Bankruptcy: Explore All Options
When considering divorce and bankruptcy, the decision to file for bankruptcy should be the last resort. A couple should explore all other available options before filing for bankruptcy.
Because the situation of each couple is unique, the set of alternatives to bankruptcy available will vary. These options can include debt consolidation and similar types of debt management schemes.
Types of Bankruptcy
When it comes to divorce and bankruptcy, a couple can select from one of two different options. Chapter 7 bankruptcy permits a couple the ability to obtain a discharge or most or even all of their debts. On the other hand, a Chapter 13 bankruptcy results in the court developing a payment plan through which a couple satisfies its obligations to certain creditors, making a monthly payment through the office of the Bankruptcy Court Trustee.
Some law firms maintain attorneys on their teams that are versed in divorce laws and other lawyers who practice in the bankruptcy arena. If that is the case, a person in need of divorce and bankruptcy assistance may be able to obtain representation through one firm. With that said, if the firm represents one of the parties to a divorce case, he or she cannot actually represent both spouses in a bankruptcy proceeding. This underscores the necessity of seeking an independent bankruptcy attorney capable of representing both parties to such a proceeding.