Banruptcy & Divorce
Bankruptcy & Divorce
Divorce and bankruptcy are chances for a fresh start for you, your ex, and your families. By understanding aspects of the two, you can make a more informed decision and come out stronger than ever. However, both of these processes can be extremely detailed and complex, and should be handled by experienced divorce and bankruptcy lawyers on your side.
Not all debts are included in bankruptcy
If you choose the route of eliminating all debt (chapter 7), it’s important to remember that not all debts can be eliminated or discharged. Debts that are deemed “nondischargeable” cannot be forgiven in the bankruptcy process, and you are still responsible for paying them back. The most common types of nondischargeable debts include:
- Alimony
- Child support
- Fines owed to government agencies
- Student loans
- Court fines and/or penalties
- Attorney fees for child custody or support cases
- Chapter 7 is ideal for a quick divorce
One of the benefits of chapter 7 bankruptcy
is the timeline of the process. Chapter 7 eliminates all dischargeable debt typically within three to six months, allowing you to file your divorce sooner if you choose to file bankruptcy first. In comparison, chapter 13 bankruptcy sets up a three- to five-year payment plan instead of completely eliminating debt, and can possibly drag your divorce or separation out longer than necessary.
If you are involved in a chapter 13 bankruptcy
and decide to file for divorce during the repayment period, you can choose to cancel or restructure the bankruptcy plan. By canceling, you agree to stop the agreed upon payment plan; however, all debt you and your spouse have assumed will still be your responsibility. If you choose to restructure the plan, it divides the plan into two cases – one for you and one for your spouse; you can then handle the bankruptcy separately from your partner.
These cases can become complex if not handled properly and can cause a lengthy divorce if anything goes awry. It’s always best to speak with a experienced bankruptcy attorney to see the best course of action for your situation.
Protect your rights, your family, and your future. Call now at (407) 478-0074
or contact us by completing our online form; for experienced debt relief advocate you can trust.