Bankruptcy and Divorce: How Does it Work and What Do I Do?
Experienced New Jersey Bankruptcy Lawyer Representing Divorcing Spouses
Financial problems are often a primary contributing factor to divorce. Many people consider filing bankruptcy either during or after divorce. Unfortunately for many, by the time you file a divorce action, bankruptcy may be the most feasible way to put the past behind and start anew. Should you file for bankruptcy before the divorce is final? Are there legitimate reasons to wait until finalizing a divorce before filing for bankruptcy? How does bankruptcy work in divorce?
A New Jersey bankruptcy lawyer at our law firm can review your financial situation with you in a confidential, no obligation free consultation. The earlier you meet with a bankruptcy attorney if you are considering divorce or are currently in a divorce, the more options you may have.
Should I File Bankruptcy as an Individual or Jointly as a Married Couple?
Whether a person should file bankruptcy as an individual or jointly as a married couple depends on many factors. It might be worthwhile to file Chapter 7 bankruptcy before a divorce, to discharge joint debts, such as credit cards. A couple can also surrender joint property in divorce that neither party can afford. This would mean less assets and debt to divide in divorce court. Of course, the couple will both have to agree to file bankruptcy and cooperate throughout the bankruptcy process.
Waiting until after the divorce is ongoing or finalized is another option (or it might be the reality of the situation). When considering bankruptcy and divorce, filers should know that you cannot discharge family obligations, such as property settlements, alimony and child support, in bankruptcy. Family obligations stemming from divorce are all specifically treated within the Bankruptcy Code and must be handled appropriately. However, getting rid of other types of debt may free up a person’s income. This means the person would likely have an easier time to continue to meet family obligations moving forward. Also, in Chapter 13 bankruptcy, you can make family support obligations part of the payment plan.
Will the Automatic Stay Stop the Divorce Process?
An automatic stay goes into effect immediately after a Chapter 7 or Chapter 13 bankruptcy filing. This prevents any further debt collection proceedings. It will also stop foreclosure proceedings and credit collections calls. Additionally, it could also affect a pending divorce proceeding until you resolve the bankruptcy or until the automatic stay is lifted. For example, a divorced spouse who is owed money from the spouse filing bankruptcy may have to file the appropriate paperwork in bankruptcy as a creditor. Although the automatic stay may halt divorce proceedings or collections actions by ex-spouses, it will not get rid of such debts.
Why Do You Need a Bankruptcy Attorney Who Understands the Divorce Process?
With more than 20 years of experience, Attorney Gary L. Mason knows the issues that can arise when couples are facing bankruptcy and divorce. He knows what actions to take when a divorce is stayed. He also knows how to keep bankruptcy and divorce processes moving.
When you work with bankruptcy attorney Gary Mason, he will personally handle your case and tackle the tough details. This means you do not have to face these difficult issues alone. He has worked with many individuals like you. Thus, he is ready to work on your behalf to protect your interests.
Reach out to a Bankruptcy Attorney for Assistance During Divorce
Bankruptcy can have a significant impact on either the resolution of your divorce or a finalized divorce proceeding. It is important to understand the interplay between these two legal proceedings. If you fail to understand these interactions, or if your attorney does not understand the overlap, it could hinder the timely resolution of your bankruptcy and divorce proceeding.
Serving New Jersey residents, we at Garland & Mason, L.L.C. provide personalized, hands-on legal representation for individuals and business owners in the Garden State. Contact our Manalapan bankruptcy law firm today to schedule a free initial consultation.