Finances are unquestionably the cause of many marital problems, but for many couples, claiming personal bankruptcy before divorcing will help them get their financial life back in order.
For many of us there remains a poor stigma about bankruptcy, but if financial issues are part of the dissension inside their partnership, personal bankruptcy can certainly make dividing up any marital assets less difficult.
Before a divorce is in full swing, a lot of people sit down with attorneys and figure out what their assets are and exactly how any liabilities will be broken down.
With regards to the sort of liabilities they have accrued over their marriage, declaring bankruptcy, as a pair, can minimize the volume of liability one or both partners will shoulder through the proceedings. Obviously, if one of the partners has far more liability than the other, that specific person might choose to consider individual personal bankruptcy.
This is when it can get sticky, as the bankruptcy court may believe that bankruptcy by just one of the partners is only an attempt to hide assets that would otherwise be subject to the division of all assets.
Given that child support, spousal alimony and lots of other financial responsibilities can not be cleared during individual bankruptcy, couples find it much easier to go through with their individual bankruptcy before they declare divorce.
Most often, when bankruptcy is finished, the couple will end up with fewer assets to divide during the actual divorce. Additionally, some lenders consider the bankruptcy and future divorce as mitigating situations when either applies for a financial loan.
Needless to say, that doesn’t mean credit will likely be easily obtained, since the bankruptcy will go on both credit files, but some creditors are a bit more understanding in this circumstance.
Considering that credit bureaus are required to maintain separate credit ranking files on both partners, if one declares bankruptcy, it may possibly not change the others credit history that significantly.
Similarly, an individual bankruptcy attorney can answer most queries about filing before a divorce, but Chapter 7 Bankruptcy may not be a possibility if their income is sufficient to support payments for a Chapter 13 filing.
If there is an approaching divorce or a potential for assets being decreased, they are not usually brought into a individual bankruptcy filing in any way.
In the event you and your partner are in financial trouble and are thinking about bankruptcy before you breakup, it’s important to seek assistance from a certified bankruptcy attorney.
A bankruptcy legal professional can help you realize what your best next steps are and help protect you from making the wrong move, in the wrong order. To give yourself the best chance for enhancing your financial situation, consider a skilled bankruptcy attorney before filing for divorce or individual bankruptcy.