announcement

Update: Check new design of our homepage!

Bankruptcy During Divorce

Bankruptcy During Divorce

Mixing bankruptcy and divorce can create quite a catastrophic situation for couples. If you and your partner are going through tough times, don't hasten and file for divorce and bankruptcy simultaneously. Wondering why? Read on to know more...
WealthHow Staff
The ultimate cure for marital problems is thought to be divorce, which it never is, in any way. In a situation, when you both are almost ready to part your ways, blame games for the financial hardship you both are facing, does not cease to exist. Financial issues are cited to be the major reason why families file for bankruptcy and couples end their marriages. Bankruptcy has become the modern-day tool to deal with financial crisis for individuals and couples. Now, if in the event of your bankruptcy filing, either you or your spouse files a divorce, it can turn out to be a complete financial and personal chaos. You both will be caught in a rut of court proceedings and your days will pass in dealing with not just one, but several attorneys. So if you are planning to file a divorce along with the bankruptcy form, then give yourself a break from any such thought.
Remember: First Bankruptcy, Then Divorce
Why you should deal with bankruptcy before divorce? The reason is simple. All your court proceedings regarding bankruptcy will get a dead halt the moment you file a divorce during bankruptcy period. You may be thinking that after filing for divorce, you will be free of any debts for which your partner is responsible. However, it is completely the opposite. If you file for a divorce before bankruptcy, you both will be bound by law on numerous fronts. You won't be able to take any decisions keeping only yourself in mind. Meanwhile, since bankruptcy process will take the backseat, your creditors will start haunting you. Keep in mind that the divorce is meant to limit you both and not the creditors.
You must be aware of the fact that any sort of debts incurred during marriage years is the responsibility of both the partners. So by applying for bankruptcy and negotiating for it, you both can lessen troubles for yourselves and mainly for the family, if you have kids. It will be a wise decision to negotiate for property or asset divisions, pay your individual chunks of debts and complete all bankruptcy requirements. We all know that bankruptcy is like a restart to the financial life. It helps to get rid of financial hardships either on a temporary basis or permanently. In the process of filing bankruptcy, if your spouse files for divorce, any bankruptcy attorney will advise you to do the same, logically. This is so because, if you both are not cooperating in the bankruptcy process and meanwhile one has filed for divorce and bankruptcy together, creditors can legally chase you for their money. Imagine the situation wherein you have been facing the impacts of harsh economy in your finances and if your creditors force you to pay the money, you may end up being bankrupt.
Bankruptcy during divorce or vice-versa is an extremely intricate situation that needs assistance of expert lawyers. You simply can't take a hasty decision in the heat of the moment regarding a divorce or even bankruptcy, or worse, you must not choose to go for both, together. Tackle each of these legal issues one by one and not strictly together. If you have a family, especially teenagers or children, you should at best avoid divorce. Besides the financial repercussions, effects of divorce on children includes emotional instability to varying degrees. Children may become emotionally insecure and may not open up to others when interacted.
It is your responsibility as a parent to secure the financial and emotional future of your child. So divorce is even bad in that sense. The cost of hiring lawyers in matters of bankruptcy and divorce is not peanuts and you will have to hire different lawyers for each case. Think deeply about your priorities and only then make a wise choice.