There are many reasons people might file for bankruptcy, and many events that may put a strain on finances and make bankruptcy a legitimate option. In some cases, a marriage failing – and a potential divorce – can be the sources of this strain.
At Utah Bankruptcy, our bankruptcy attorneys can help you manage bankruptcy cases that involve a pending or recent divorce. Let’s look at a few important factors for divorces surrounding bankruptcy, and give a few basic tips.
Which Should Be First?
Unfortunately, there isn’t a standard answer here. Determining which should come first will often come down to how you plan to dissolve the marriage, and whether the divorce will be contested or not. If it appears there won’t be an agreement on dividing resources and it looks as though litigation is likely, retaining an experienced bankruptcy lawyer is absolutely vital. Having counsel in both the bankruptcy and the divorce is very important – you need attorneys who understand both sides of this picture, and how one might affect the other.
Asset Dividing
One of the biggest challenges in a divorce is dispersing funds and assets, and this becomes more complicated when bankruptcy is also in the picture. If a spouse is ordered to pay a debt from divorce, that obligation cannot be discharged during bankruptcy filings. Anytime a divorce takes place before bankruptcy, it’s important to look at the final divorce decree to see if you’ve assumed any debts during the divorce – if you did, the provision we mentioned would kick in, and you would need to continue to pay that debt.
Single Or Joint?
If you aren’t yet divorced but may be doing so soon, whether you should file bankruptcy together or separately is an important question. Filing together can save money and court fees, and can also take away the issue of exception from discharge that we noted above. In many cases, filing together can make for a less costly and time-consuming process.
To learn more about bankruptcy and divorce, or to find out about any of our other services, speak to the experts at Utah Bankruptcy today.
