When Divorce And Bankruptcy Intersect
Debt problems can cause sharp divisions in marriage, leading to divorce. A divorce can cause financial hardship, often times necessitating the debt relief provided by bankruptcy. For these and many other reasons, divorce and bankruptcy often go hand in hand. However, sometimes bankruptcy isn’t the only solution to solving debt issues with your soon-to-be-ex-spouse. I often consult with divorce attorneys to provide solutions that will address the marital debt without the need to file bankruptcy. This also can include how to best preserve your assets, including how to handle the marital home if you owe more than its worth.
We are LaRese Law, a bankruptcy Firm in Southbury, Connecticut. If you face divorce as well as debt problems, we can advise you as to the timing of the bankruptcy, the type of bankruptcy to file and other factors to maximize your total debt relief.
When Should I File?
Both filing for bankruptcy and filing for divorce can be overwhelming. It can be confusing to determine when to file. Whether you file for bankruptcy before or after your divorce will have a big impact on your outcome in both legal areas. It’s important to evaluate how the order of filing will affect your unique situation.
There may be a number of advantages to filing for bankruptcy before the divorce, including:
- If you file before your divorce, you can eliminate debt issues, simplifying the dissolution of your marriage.
- Spouses can file jointly for bankruptcy, saving money by only paying for one bankruptcy instead of two.
- Under Connecticut bankruptcy exemptions, each spouse can keep up to $75,000 in equity in a home. If you file jointly, you can take advantage of the full $150,000 exemption.
This is not to say filing bankruptcy first is right for you. Only after thoroughly reviewing your full financial situation can I advise you as to the timing of your bankruptcy as it relates to your divorce.
Talk To An Attorney Who Can Help
No one wants to face debt problems or divorce, but there are legal solutions that can help you achieve a brighter tomorrow. For knowledgeable guidance and advocacy regarding bankruptcy in Connecticut, contact my law office online or by telephone at 203-583-8668.
My firm is a debt relief agency. I help people file for bankruptcy relief under the Bankruptcy Code.