Divorce and Bankruptcy
It’s common for financial issues to arise during divorce. For many couples, financial disputes are one of the main reasons the marriage ends. In cases where there are serious financial challenges, divorce proceedings will occur shortly before, after, or during a bankruptcy. When this happens, there are several things both spouses need to consider in order to protect their interests.
How is Bankruptcy Beneficial to Divorcing Couples?
Divorce can make a bad financial situation even worse, which means drastic measures are often needed to provide relief. Bankruptcy is one of the best ways to help couples get back on track financially.
Certain debts are not dischargeable regardless of the type of bankruptcy, including:
- Child support
- Alimony/spousal maintenance
- Student loans
- Most tax debt
- Some criminal fines and penalties
When Should I File for Bankruptcy?
If bankruptcy proceedings begin before your divorce is final, you might want to consider joint filing. This is especially true if the majority of debt is in your name and your spouse’s. When debts are jointly owned, you are both responsible for the debt. Joint filing, though it might not seem ideal, can help you avoid much of the frustration that comes with negotiating division of assets and debt because many of these issues will be resolved during the bankruptcy proceedings.
Keep in mind if your spouse files for bankruptcy on a debt that is determined to be the responsibility of both of you, the creditor can still hold you responsible for the debt, even if it is discharged in your spouse’s bankruptcy. This is the primary reason joint filing is beneficial for both spouses.
Once your divorce is final, joint bankruptcy filing will no longer be an option, even if your debts are shared.
If you are struggling with finances amidst you divorce, the first thing you should do is contact an experienced attorney. It can be extremely helpful to work with someone who has experience with divorce, as well as bankruptcy. To learn more about divorce in Florida or to schedule a consultation with an attorney, contact The Law Offices of Robert M. Geller at (813) 405-1509 or use the online contact form.
