Divorce and Bankruptcy
Divorce and Bankruptcy
Many marriages end in divorce, and 2020 has seen the divorce rate skyrocket due to the COVID-19 pandemic, shelter-in-place orders in the spring, and more. There is no doubt that divorce will change almost every aspect of your life, including your finances.
If you have divorce in your future – or you recently got divorced – you might be facing a difficult financial situation. This is an issue you should address so that you can move forward post-divorce in the best situation possible. Bankruptcy might be the right option, though the combination of divorce and bankruptcy can be complicated. Always speak with an Indiana bankruptcy attorney about your best options.
Financial Issues from Divorce
There are many reasons why divorcing individuals might consider filing for bankruptcy. First, many marriages end due to financial concerns and stress, so the debt-related issues might stem from well before the divorce process begins. In addition, divorce can result in more financial struggles for the following reasons and more:
- You have to cover attorney’s fees and court costs
- If you are living separately, you and your divorcing spouse might be covering two housing payments and related expenses
- You have to divide your assets and property
- You might be deemed solely responsible for certain debts
- You lose the financial earnings of your spouse
If you find yourself staring down debts that you cannot afford to pay as you divorce, you should not hesitate to learn about the bankruptcy process. Filing a case can help you ease your financial burden after this often challenging transition.
When to File?
Many people assume that they should wait for their divorce to be finalized and then file for bankruptcy. However, this timing is not always beneficial. Let an attorney review your debts and other aspects of your situation so they can advise you on the best timing of your filing.
Some divorcing spouses choose to file for bankruptcy together, which you must do prior to finalizing your divorce. Only married couples can file joint bankruptcy petitions, and there might be benefits to this, such as:
- Protecting more property with double the state exemption amounts
- Only having to pay for one bankruptcy lawyer
- Getting rid of debts so there is less to divide in the divorce
In addition, if you have joint accounts that you are seeking to discharge, you want to file jointly. If you do not, your former spouse might still be responsible for paying the debt if you file individually.
One exception is if you are considering Chapter 13 bankruptcy. This process lasts three to five years, so you likely want to file individually to avoid being wrapped up in a legal case with your former spouse for years. Chapter 7 bankruptcy, on the other hand, can often be finished relatively quickly pre-divorce.
Discuss Your Situation with an Indiana Bankruptcy Lawyer
Bankruptcy can relieve additional stress from divorcing couples, and Indiana bankruptcy attorney Kevin M. Schmidt can help. Contact us online for a free consultation and case evaluation today.
Schedule A Free Consultation
At the Law Office of Kevin M. Schmidt, P.C., we offer a free consultation during which we will examine the facts of your case and advise you on how best to proceed