Figuring Out Your Divorce Timing When You Want To File Bankruptcy
Posted on: 2 August 2019
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If your marriage is ending and you are on the brink of financial disaster, you may be considering bankruptcy attorney services. When both parties want to file for bankruptcy, it can be easier to file your bankruptcy paperwork before the divorce because you can file together. Any marital debts that can be discharged will be, and separating any debts or assets that are left will be cleaner. Filing together also allows you to pay one filing fee, and will prepare you for the divorce ahead. If only one party wants to file for bankruptcy, you will have to wait until after the divorce. When you are the one looking to file bankruptcy, it's important to pay attention to the debt you take on.
Debt You Can Discharge
Unsecured debt, such as credit card debt, can be written off in a bankruptcy filing. If you have credit card accounts that belong to both of you, it is considered a marital debt. If you are the one that wants to claim bankruptcy and your spouse doesn't, taking over any unsecured debt is going to help you in the future. If the divorce is amicable, your spouse may be willing to take on the debt that must be paid back anyway, so that you can claim the debt to be discharged.
Debt That Has to Be Paid Back
There are certain debts that must be paid back, even if you declare bankruptcy. Income tax debt must be paid back, and both parties are responsible for the bill. Even when the income tax debt is assigned to your spouse in the divorce, any refund you get each year will go to the debt until it is paid. While you will be able to get your money back in court, the time and energy may not be worth it.
Know What Assets are Yours
Marital property is divided up in a divorce, while separate property remains yours. If your spouse has significant debt in their own name and you have an inheritance, it's important to get your divorce first to avoid any confusion. Your assets are yours to keep, as long as they are identified as your separate property.
It's confusing to file for a divorce and a bankruptcy at the same time. To keep the process moving forward, choose whether you are going to file together or separately. Divide up your debt, and move forward from the divorce.