If you are considering divorce and bankruptcy, Balbus Law Firm can help you determine whether bankruptcy is an option for you and, if so, whether you should file bankruptcy before or after your divorce.
The timing of the bankruptcy filing can be a strategic matter based, in part, on the nature of your debt and the kinds of assets that will be divided between the spouses. The treatment of particular assets, such as life insurance policies, retirement accounts, 529 tuition plans and tax refunds may need special attention.
Filing Bankruptcy Before Divorce
In many cases, filing bankruptcy before divorce will be preferable. When you file bankruptcy first, you may eliminate debt that might otherwise have to be divided between you and your spouse, making the divorce simpler. Additionally, prior to divorce, you and your spouse can file bankruptcy together which may reduce fees and entitle you to keep more property. Consideration needs to be given to household size and qualification for Chapter 7.
Filing Bankruptcy After Divorce
In other cases, it may be preferable to divide marital property before filing bankruptcy. It may not be necessary for both spouses to file after divorce. Qualification for Chapter 7 may be aided by having separate households even though the household size is smaller.
For many people, debt does not become unmanageable until after a divorce, when they are forced to adjust to life with a single income. Often, the parent granted custody of a child, even if she or he receives child support or alimony, may face overwhelming debt. Bankruptcy may resolve that unmanageable debt so that you can get your life back.
While child support and alimony are never dischargeable in bankruptcy, eliminating other debt may make it easier to pay child support and alimony. Unlike alimony and child support, some property settlement obligations may be dischargeable in Chapter 13.
To Learn About The Intersection Of Bankruptcy And Divorce, Contact Us For A Free Initial Consultation
To determine the most effective strategy in terms of filing bankruptcy and divorce in a free initial consultation, call 203-286-4121 or email us.
Balbus Law Firm is a debt relief agency. We help people and businesses in New York and Connecticut file for bankruptcy relief under the Bankruptcy Code.