Blog Posts

Divorce and bankruptcy are often twin challenges

Divorce and bankruptcy are often twin challenges
February 18, 2019

One of the most common reasons for divorce is financial issues, so oftentimes a couple filing for divorce will also need to file bankruptcy. Whether it happens before, during or after the divorce, a bankruptcy filing will likely complicate the divorce action, regardless of whether the bankruptcy is filed jointly or individually.

Issues to consider with divorce and bankruptcy

Those contemplating bankruptcy and divorce should seriously consider determining a course of action before beginning these processes. These tips may be useful for starting what can be a process filled with many difficult decisions:

  • Do not file your divorce and bankruptcy actions at the same time: Many who have gone through the process regret it if they try to do both at the same time.
  • Start with bankruptcy: This may not be possible, but financial experts believe that bankruptcy is a better place to start. It puts a stop to creditor harassment and it can be advantageous to file jointly. By freezing the assets in bankruptcy, however, it also becomes harder to divide marital assets until the bankruptcy case is finished (or discharged).
  • Chapter 7 is faster and likely more appropriate for individual taxpayers: The filing and reordering of assets and debts happens over a few months rather than Chapter 13’s restructuring with payment plans that last three to five years.  Not all taxpayers qualify for a Chapter 13.
  • Not all debt is discharged: There are many financial obligations that continue during bankruptcy, including alimony, child support, court fines, student loans and money owed to the government.

Start by making an informed decision

The circumstances of each couple’s finances are different, so it is generally recommended that individuals and couples discuss their divorce and bankruptcy with an experienced family law attorney. The bankruptcy matter can then be handled by a bankruptcy lawyer. This approach will likely reduce the amount of stress involved and could be helpful to the future financial health of the family.

Join Our Mailing List
Updates & Firm News
Contact us to Discuss

Your Family’s Legal Issues

Whatever legal issues your family is facing, rest assured we can be of assistance. Call our Ventura office at (805) 639-0600 or contact us online to set up an initial consultation with a family attorney near you.
Get in Touch

Request A Consultation

Contact Us Today To Schedule Your Initial Consultation

    Crafted By Legal Leads Pros
    Close Menu