Bankruptcy or Divorce Which Comes First ?
Apart from bankruptcy, another major personal legal undertaking by many in Michigan is perhaps divorce. Though the number of divorce has gone down since 2005 this does not necessarily ensure the decline in the rate of divorce which varies with respect to the population fluctuation. Often, it is observed by those in the legal profession that an individual tend to file bankruptcy and divorce consecutively or parallely even sighting bankruptcy as an outcome of divorce and often vice versa. But how far are these two distinctly different legal procedures interrelated, if at all related? Both divorce and bankruptcy are expensive legal undertakings but if chosen wisely, one can complete both the legal filings quickly and in a cost-effective way.
Can we file Bankruptcy and Divorce Simultaneously ?
Filing Bankruptcy often involves distribution of assets to creditors which is a complex procedure and may cause disputes in case of joint properties. So It is best advised to complete the bankruptcy filing before continuing with divorce. Depending on your marital status, the federal court treats your income and savings accordingly which may also get hampered if you try to parallel tackle both the issues. Filing for divorce simultaneously can delay your bankruptcy discharge which in turn may result in further harassment.
Chapter 7 or Chapter 13- which one should I file for ?
Chapter 7 or liquidation bankruptcy wipes out your dischargeable debts through distribution of non-exempt properties that you own and the case is closed within a few months. Hence the whole bankruptcy procedure gets over fairly quickly and you can file for divorce after that.
However chapter 13 or repayment plan bankruptcy is a slow procedure where you fully or partially pay off your debts over a span of 3-5 years. If you are in a hurry to divorce, this is definitely not a good plan to go ahead with. But then you may want to retain your property as well. So the decision entirely depends on your priorities.
We understands such situations and we handle clients with such sensitive crisis delicately and try our best to advice you on what will be of your benefit.
What if I file for bankruptcy after divorce?
In case you file for bankruptcy as a single after divorce, the creditors cannot sue you for payments of debts due to the automatic stay. But it is not unheard of that creditors harass your ex-spouse for the same debt since it was signed for together. In this situation if the ex-spouse is forced to pay these debts he or she can again sue you at divorce court for compensating the amount and you end up paying the debts anyways.
Seek Professional help:
Both divorce and bankruptcy are complicated and it can rightly be said that handling both together is like biting off more than you can possibly chew. Both have its own advantages when filed before the other. One should recognize his or her priorities though before making any concrete decision.
It is likely you will be completely overwhelmed by the stress and a complexity of both the issues and this is where your lawyer steps in. We always advice filing bankruptcy over divorce as the later can always be reconsidered and reconciled till the very end unlike a situation calling for bankruptcy filing which rarely have other ways out.
Should you want to seek further detailed and personalized advice, our compassionate and friendly professionals at A Better Way Bankruptcy would be happy to help you. Book your FREE appointment with us today through our website www.abetterwaybankruptcy.com or our Toll FREE number 1-844-ERASE-BILLS.