It’s not surprising that some couples find that they are faced with a bankruptcy and a divorce at the same time. Serious financial difficulties accompanied by collection calls can push an already strained relationship beyond the breaking point. It’s unfortunate but, according to Family Law Attorneys in Wichita, it happens.
Is it Possible to File for Bankruptcy and Divorce at the Same Time?
Technically, it’s possible to file for both simultaneously, but it’s not advisable. Normally, the bankruptcy will take precedence with the courts. Until the bankruptcy is completed, the distribution of assets and liabilities in the divorce will be delayed. As a practical matter, a divorce and bankruptcy cannot proceed at the same time.
Should Bankruptcy be Filed First?
When the bankruptcy is filed jointly, all debts will be included in one bankruptcy case. This will wipe out joint debts and may increase the exemption amounts. If one spouse is the primary or only wage-earner, filing jointly will increase the chances of that spouse qualifying for a Chapter 7. Bankruptcy can also eliminate unwanted debt such as expensive car loans and a mortgage on a home that is underwater, simplifying the divorce. A Chapter 7 bankruptcy only takes about 90 days to complete.
If spouses file jointly for a Chapter 13, both parties will be responsible for the repayment plan. The bankruptcy would also complicate the division of assets in the divorce.
Should Divorce be Filed First?
If the family income exceeds the qualification limits for filing Chapter 7, the practical choice could be to get divorced first. The divorce could reduce each person’s income so that they would qualify for Chapter 7 and not have to assume a Chapter 13 repayment plan. If both parties could not qualify for Chapter 7, one might be able to.
Divorcing first can protect one spouse from debt, such as a home mortgage, that now belongs legally to the other spouse. Having the amount of support already determined will be helpful in the event of a Chapter 13 repayment plan since that would be included in the calculations.
The attorneys at The Law Offices of Todd Allison and Sarah Newell are very experienced with both bankruptcy and divorce. Before filing anything with the court, consult these Family Law Attorneys in Wichita. Schedule an appointment to discuss all of the issues and make the best decision possible. You can also visit them on Google+ for more information.
