Thursday, February 6, 2014

Is Bankruptcy Possible when Filing for Divorce?

Bankruptcy law firms like Grainger Legal Services are often asked by divorcing clients if it is safe to file a petition. They are worried that one process may interfere with the other. That is not really the case. Here is what citizens in such a challenging conundrum should know.

Filing a Petition during Divorce

Divorce and bankruptcy are 2 different types of legal processes. They do not have much in common. A judge is not going to throw out your request to discharge your debt just because your marriage is ending. It also works the other way around. All you have to worry about is that you have funds to pay both of your legal counselors. Educate yourself a little, because you are quite mistaken when you believe that a bankruptcy claim will eradicate child support and alimony payments. It will not work.

Joint Debts Are Not Forgiven

Debts that are part of your divorce agreement are usually not wiped out during a bankruptcy procedure. Creditors should not contact you after filing a petition. If they have something to say, they have to go through your lawyer. They can also contact your ex-partner for payment. If you remain stubborn, your spouse can take you back to divorce court, where a judge will order you to honor your responsibilities. Be prepared to pay him or her the outstanding amount. Refusing to cooperate does not leave a good impression on the presiding divorce judge.

Not All Divorce Debt Is Eliminated

Not all divorce debt will be wiped out during bankruptcy, even if you file for Chapter 7 bankruptcy. When you opted for Chapter 13 bankruptcy, the accumulated liabilities will be rolled into a manageable payment plan. Your trustee will request detailed financial information. Each month, leftover funds and additional income will be dispersed among your creditors. That includes your ex-wife or husband.

Bankruptcy before Divorce

Did you just discover that your ex-spouse filed a bankruptcy petition? It may not be a bad idea to file jointly if a lot of debt was accumulated during the marriage. Before taking any actions, request a consultation with a bankruptcy law firm such as Grainger Legal Services. Explain your situation in detail. Give the lawyer time to review your case. Sometimes, other debt-relief options may be more efficient to secure a healthy financial future.

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