Should I file bankruptcy before or after divorce? This question is common because divorce can often create debt problems that lead to filing bankruptcy. However, the decision to file Chapter 7 or Chapter 13 should not be made lightly. There are situations in which filing bankruptcy before a divorce can be better for a couple than waiting until after the divorce to file for bankruptcy relief.
Working with a Phoenix bankruptcy attorney is the best way to ensure that you choose a debt relief plan that is best for you now and in the future. If you are contemplating divorce and are struggling with debts you cannot pay, contact Allegiant Law Group now for a free consultation with an Arizona bankruptcy lawyer. We can work with you and your divorce attorney to determine if filing bankruptcy now is right for you.
Filing Bankruptcy Before a Divorce
Money problems cause stress in a relationship. Couples may struggle with debt problems for years before a divorce. For some spouses, filing a bankruptcy case before a divorce can benefit them in the long term.
Filing a Chapter 7 before your divorce can save money. A couple can file a joint Chapter 7 bankruptcy case, which means one bankruptcy court filing fee, one fee for bankruptcy courses, and one bankruptcy attorney fee. If you file separate bankruptcy cases after the divorce, you pay double.
By filing a Chapter 7 case, you and your spouse may be able to get rid of most of your debts in four to six months. Then you can proceed with your divorce free from the worry and stress of dealing with debt problems.
However, if you and your spouse do not qualify for a Chapter 7 case, you may not want to file bankruptcy before divorce. Filing a Chapter 13 case commits you to a three to five-year bankruptcy repayment plan. Most individuals do not want to be tied to their ex-spouse financially after the divorce.
Furthermore, once you are divorced, you may qualify for Chapter 7 without your spouse. Our Arizona bankruptcy attorneys can analyze your finances to determine if you might qualify for Chapter 7 after the divorce.
Bankruptcy Does Not Get Rid of Alimony or Child Support Payments
Child support and alimony are not dischargeable in bankruptcy. You cannot file a Chapter 7 or Chapter 13 case to get rid of domestic support obligations. Therefore, filing bankruptcy after divorce does not relieve your responsibility to pay support payments.
However, if you are behind in your spousal support or child support payments, filing Chapter 13 might help. Bankruptcy laws allow back alimony and child support to be included in a Chapter 13 repayment plan. The past due payments are paid through your bankruptcy plan. Future alimony and child support payments must be paid on time or your Chapter 13 case could be dismissed.
Contact Our Phoenix Bankruptcy Attorneys for More Information About Divorce and Bankruptcy
Dealing with two court actions simultaneously can be stressful. Before you decide to file a bankruptcy case in the middle of a divorce proceeding, contact our office to discuss the consequences of that decision. Once you file bankruptcy, it may be difficult or impossible to undo the filing. It is best to have competent, experienced legal counsel to guide you through the decision to file Chapter 7 or Chapter 13.
The legal team of Allegiant Law Group is here to help. Call 602-562-1000 now to schedule your free consultation with an Arizona bankruptcy lawyer. You may also contact our office online to request more information about bankruptcy as a debt relief option.