Should You File For Bankruptcy Before or After a Divorce?
When financial strains mesh with filing for divorce, knowing when to file for bankruptcy to relieve marital and personal debts is critical. Depending on your situation, it’s usually best to file for bankruptcy before starting the divorce process. Here are some reasons why.
Why It’s Best to File for Bankruptcy Before Your Divorce
Filing for bankruptcy jointly with your ex-spouse before you start your divorce proceedings can make dealing with joint debt much easier in your divorce. For example, credit card debts, utility bills, and other marital unsecured debt can be discharged through bankruptcy. This means that your joint debt is wiped out, and it’s one less thing to worry about during your divorce. Filing for bankruptcy [“jointly"?] is also cost-effective and is less expensive than filing separately.
What Happens if You File For Bankruptcy During Your Divorce?
Filing for bankruptcy amid your divorce can make matters complicated. When filing for bankruptcy, an “automatic stay” is established. While the good news is that creditors can no longer contact you, your assets are frozen so that the bankruptcy courts can see what debts you owe and if you can pay off some of it. The automatic stay is in place throughout the entire bankruptcy process. If your divorce and bankruptcy overlap, you wouldn’t be able to divide your assets until your bankruptcy is finalized. This can make the divorce more contentious and costly.
Have Questions About Divorce? Call Grewal Law PLLC Today.
Having financial strains in addition to heading into a divorce can make for a highly stressful situation. While it may seem like it’s a never-ending battle, knowing that your legal rights are being protected and you’re receiving support from your divorce lawyer can ease your fears and concerns. Let Grewal Law PLLC guide you through the process so you can feel at ease knowing you can move forward with your life.
We are here to help you with all your family law needs. Contact Grewal Law PLLC at (888) 211-5798 to schedule a free consultation today.