Coping with the ending of your marriage can be stressful, especially when you are also struggling with a large amount of financial debt. It’s understandable to feel overwhelmed by a sense of powerlessness and confusion, which is why you should consider working with a compassionate attorney to help you explore your options. Whether financial issues have led you to pursue a divorce or you are concerned that the divorce will leave you with seemingly insurmountable debt, a trusted New York bankruptcy attorney can assess your situation and guide you through the legal process of obtaining the fresh start you need to move forward with greater clarity and confidence. Here’s a basic overview of how bankruptcy and divorce matters intersect and how you can determine which bankruptcy option will best suit your needs.
The Overlap of Finances and Marriage
It’s no secret that divorce can be expensive. As the spouses start to explore their financial situations after the divorce is finalized, they may worry that they will not have the financial stability they need to move forward. Additional financial burdens stemming from the divorce, such as spousal support or child support obligations, can create additional stress. In the face of these significant economic implications, many couples wonder whether to file for bankruptcy before pursuing a divorce or if they will be better served if they wait until the divorce is finalized before moving forward with the bankruptcy process.
How Bankruptcy Can Affect the Divorce Timeline
If you file for bankruptcy while your divorce is still in progress, this action may delay the final divorce settlement or trial. As part of the bankruptcy process, the automatic stay pauses and court proceedings you are involved in, including the divorce. Another factor is whether there are assets to distribute in the divorce (house, money settlements, etc.). The decision whether to file for bankruptcy before or after your divorce depends on several complex factors, so it’s highly recommended that you discuss your situation with an experienced Central New York and North Country bankruptcy attorney to determine the most successful course of action.
Filing for Bankruptcy Before a Divorce
For some couples, filing for bankruptcy before pursuing a divorce may be a good option. While the bankruptcy filing will delay the divorce process for a bit, both individuals may be able to obtain the fresh start they need to enjoy the next chapter of their lives. If you are able to wipe away your debt in bankruptcy before the divorce is finalized, that is one less issue in the divorce (who is responsible to pay what debts). Also, filing jointly for Chapter 7 bankruptcy relief allows you to share the filing fees and enjoy the protections afforded to you by the bankruptcy court. If you and your spouse own property together, you may benefit from filing before your divorce is finalized. However, filing jointly may put you over the threshold for pursuing a Chapter 7 bankruptcy. You and your soon-to-be ex-spouse must also be able to communicate openly and honestly—while no one expects you to be on amicable terms, you should be able to make decisions and navigate the bankruptcy process with civility and respect. Discuss the specifics of your situation with your bankruptcy lawyer to learn more about whether filing for bankruptcy before pursuing a divorce is best for you.
Pursuing Bankruptcy Relief After Your Divorce
Some individuals may prefer to file for bankruptcy relief after the divorce is finalized. However, it’s important to understand that certain debts cannot be discharged through a Chapter 7 bankruptcy filing, such as child support and alimony obligations. You also would not be able to remove your obligation to pay any debts that you were required to pay pursuant to the divorce decree. While the Chapter 7 bankruptcy process tends to move quickly, you should work with your bankruptcy attorney to determine whether you qualify for relief and, if so, what you should expect from each step of the process.
Compassionate Legal Guidance for New York Individuals
If you are struggling with significant debt, you are not alone. Individuals, families, and businesses across the country are facing financial hardship, which the pandemic and economic fallout have exacerbated. This financial anxiety can become even more overwhelming when coupled with a failing marriage. Before you lose all hope, consider speaking with a trusted and compassionate bankruptcy attorney. Many people still tend to view bankruptcy as a desperate and even shameful option, but it’s designed to give people the opportunity to rebuild and regain control over their financial situations. Your attorney will treat you with the care you need during this difficult time, helping you understand your options so you can make informed decisions with greater certainty. It’s time to take control of your future—get in touch with a trusted Central New York and North Country bankruptcy attorney today.