The Big B And D: When Bankruptcy And Divorce Face Off
As if one major life change was not enough, it is not uncommon for divorce and bankruptcy to fall within the same short time frame. When two people in one household suddenly split into two separate entities, the financial strain can sometimes be too much for one or the other person to handle. Further, divorce sometimes means alimony, child support, and other new expenses that take up a great portion of income that was readily available before the division. If you find yourself standing on a line between the big "D" and the just as ugly big "B", you will definitely have a few unique concerns to address.
Is it possible to file joint bankruptcy after a divorce?
Once the divorce is final, it is very rare for two people to be able to file joint bankruptcy. One of the few exceptions is if the two of you have a joint business ownership and you file chapter 7 bankruptcy for your business, but not personal, finances. It is far too difficult to get two divorcees to take joint ownership of debts that are not in their name. Further, it is worth noting that if one joint applicant files for bankruptcy after a divorce, it can become the other's responsibility to repay the debt.
Is it true that filing for bankruptcy before a divorce is final can make things easier?
If there is any possible way to foresee a bankruptcy filing in your near future after a divorce, it is ultimately best to head for the big "B" first. During chapter 7 bankruptcy proceedings, many issues with assets and joint debt will be addressed, which will make the following divorce easier to wade through. For example, if you have joint ownership of your home that is still under mortgage, the attorneys will work to find the most fair resolution of the debt and the home.
Can you file bankruptcy on family maintenance payments?
Even though the new child support or alimony payments may be the source of your financial strain, bankruptcy will do little to alleviate these debts. It is not possible to file on these debts, just the same as you would not be able to file on student loans or owing taxes. However, eliminating other debts can help you free up some of your income to help you be more capable of paying your maintenance payments.
Being in the middle of both bankruptcy and divorce can feel like standing in the middle of a rock and a hard place. Be sure that you take some time to carefully consider all of your options and work with your attorney, like Schneider Steve Atty At Law, to see the best possible outcome.