Divorce and Bankruptcy

The Connection Between Debt and Divorce

Diagnosing a Problem

Think about it. When you earn a good salary, save a significant portion of your paycheck, and pay all of your bills on time, life is good. Your spouse is happy and you feel good about yourself. But, when you finances stall and you must deal with unpaid bills, maxed out credit cards, and harassing creditors, your relationship with your spouse can be overshadowed by debt. You cannot spend, you have to cut corners, tempers flare and blame is exchanged.

Providing a Compelling Solution

Financial problems are the root of many divorces, and the financial aftermath of divorce is the root of many bankruptcies. If you are considering filing for divorce and filing for bankruptcy, it is crucial to get solid legal advice early in the process. Should you file before divorce, or after? The wrong moves could make you ineligible for bankruptcy, cost you thousands of dollars, or cause credit problems down the road.

The timing of the two proceedings can be very important, and the complex issues of division of property and division of marital debt can have a significant impact on (a) your ability to qualify for bankruptcy, (b) the debts you can discharge and (c) the assets you can keep.

• If you have not yet filed for divorce and you are carrying major debt, are you willing to file the bankruptcy together and then get a divorce? There can be significant advantages to both of you.
• However, your combined incomes may prevent you from qualifying for a joint Chapter 7 bankruptcy. One solution may be to file separately for bankruptcy so that each of you can qualify for Chapter 7. We can explain the pros and cons, as well as the option of filing jointly for Chapter 13 reorganization.
• If you are already divorced, or dissolution proceedings have begun, we can advise you of important considerations.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.