It’s no surprise to anyone that financial problems stress a marriage: harassing calls and letters from creditors can become a constant source of strife within a troubled relationship. While there may be many factors causing a particular divorce, fights over money – or lack of it – are often an important factor.
Each couple’s situation is unique, but one question that people often wonder about is whether it is better to file for bankruptcy before, during or after a divorce. The easiest part of the question to answer is the “during.” Since family court judges and bankruptcy judges do not look at issues such as jointly held debt in the same way, it is better to have either the bankruptcy or divorce be finished before filing for the other type of case. Chapter 7 bankruptcy in Topeka, KS allows for the discharge of a portion or all debt while normally keeping all possessions and it only takes a few months, while chapter 13 would take 3-5 years to conclude.
Filing for Bankruptcy First
As a rule, a bankruptcy will take precedence in the courts over a divorce. Normally, a family court judge would postpone a divorce case until the bankruptcy concluded. If the spouses are able to work together, a joint Chapter 7 bankruptcy will eliminate the joint debts and may increase the exemption amounts. If one spouse is the sole wage earner, that spouse is better able to qualify for a Chapter 7 in a joint bankruptcy which will eliminate unwanted debts such as very high car loans or mortgages on homes that are totally underwater. The divorce will be simpler when filed after the bankruptcy concludes.
Filing for Divorce First
High income couples could do better if they are divorced before filing for bankruptcy protection. Debt that is held in one name only could be gotten rid of quickly in a Chapter 7. If one spouse receives the house in a divorce, proper planning can protect the former spouse from creditors. Having a divorce first will also allow the amount of child support and alimony to factor into the bankruptcy.
Joseph I. Wittman understands the complications of divorce and Chapter 7 in Topeka, KS. Before filing for either, sit down and talk about what would work best for you. Click Here to visit his website and contact him.
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