People often file a Divorce and then a Bankruptcy. But people also reverse this order and first file a Bankruptcy and then Divorce. Regardless of how it happens studies show you can actually be better off financially by properly filing your bankruptcy and getting the maximum effect. You discharge the debt, you keep the assets.
Financial disasters cause stress, and disrespect which leads to Bankruptcy& Divorce. You can’t discharge child support or alimony in Bankruptcy. But you can make child support, alimony and life more affordable by filing a Chapter 7 or Chapter 13 Bankruptcy.
By discharging less important debts like credit cards and medical debt you can make sure alimony or child support is paid or you can stop a foreclosure. You may be able to file a joint petition as long as you are still married. If you can’t work together bankruptcy may be a tool are forced to use to make life affordable or to save property. Even if you can’t agree on anything else, you may have to file.
Filing jointly or separate bankruptcy petitions
When you can file jointly the cost is cheaper. You may want to file separate petitions. If the bankruptcy includes a foreclosure, filing one bankruptcy prior to the sale stops the sale. Filing a second bankruptcy stops the sale again giving you 6 or more additional months in the home before it finally sells. This is when people should plan together for what is best for everyone. Unfortunately, some couples can’t always work together even if children are involved.
Paying child support or alimony through a Chapter 13
If you do have back owed child support or alimony it can be paid through a Chapter 13 at the expense of unsecured and sometimes even secured creditors. Child Support and Alimony are priority debts. Priority debts are paid before house, car and unsecured debts are paid in a bankruptcy.
By paying child support and alimony through a Chapter 13 you can force the medical and credit card debt to be paid at as low as 0 percent. The Chapter 13 payments are voluntary you can quit a Chapter 13 at any time. But payments can be payroll deducted to insure child support and alimony is paid.
Filing before and after a Divorce
When a couple is still married you may want or need to resolve your debt problems together. Resolving debt problems after the divorce is less likely to work. After a divorce you are less likely to work together to tackle problems. Often the divorce leaves one of the partners less able to afford a home. These divorce related foreclosures and bankruptcy cases are common.
The problem of Bankruptcy & Divorce also happens when your spouse files bankruptcy after the divorce. When the spouse files bankruptcy the burden of the debt often shifts to the non filing spouse. It often forces the other spouse to file. Also a spouse can file a Chapter 13 and not repay debts. Even when the marriage settlement agreement said a spouse should repay a debt a Chapter 13 may cancel an obligation to pay pay debt to a former spouse.
Contacting a qualified Louisville Kentucky Bankruptcy Divorce attorney
Since 1988 Nick has filed thousands of bankruptcy and foreclosure defense cases. This is longer than almost every other office. We wrote the books on foreclosure and bankruptcy. Contact our office to schedule a free appointment at 502-625-0905. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.