If you are going through a divorce and have accrued significant debt, one way of reducing your stress could be filing for bankruptcy. However, the timing of the filing is essential, which is why you should have a bankruptcy lawyer to help you through.
Bankruptcy and Divorce
It is important to remember that it will not affect your divorce, custody, alimony, or child support if you file for bankruptcy. However, the bankruptcy will delay the way your assets are distributed until the bankruptcy case is over.
A majority of people file for Chapter 7 bankruptcy. If you work with a bankruptcy lawyer in Miami, Florida, it will be a quick process, and within three to four months, the case usually gets completed. In this chapter, the debt gets wiped, and there is no need to pay your creditors with the help of a repayment plan.
Chapter 7 bankruptcy also enables you to keep the home you need for living and property you need for your livelihood. So, that can do away with the need to hire a foreclosure defense attorney Miami.
All your assets are placed within a bankruptcy estate, and the court appoints a bankruptcy trustee. The estate will sell the assets that are not exempted and protected, and the amount that the sales generate is then distributed among your creditors.
There is a reason most people do not file for Chapter 13 bankruptcy during a divorce. In this chapter, the married couple will be responsible for the repayment plan, usually for three to five years. However, since most divorces are bitter, couples do not file for Chapter 13, and each person usually opts for Chapter 7 bankruptcy.
When to File for Chapter 7 Bankruptcy?
As a reasonable divorce attorney in Miami, Florida, will tell you, it is best to file for Chapter 7 bankruptcy before you file for divorce. It will help reduce the costs of filing separately.
If you do it as a couple, assuming that you are still on good terms, it will help get rid of qualifying debts, such as personal loans, credit card payments, and utility bills that are due. As a result, you will have fewer assets to divide.
Bankruptcy will also take care of expensive contracts that are burdening you and no longer want to be held liable for them. So, you can say goodbye to a home mortgage or car loan. If you work with a good and experienced bankruptcy lawyer in Miami, Florida, there is a possibility to protect more property and ensure more assets are exempted. This could be a win-win situation for you as a couple, even though a couple of months down the line, you will be filing for a divorce.
The Bottom Line
If you and your spouse work, the bankruptcy court will take the combined salary. Usually, the total of the two exceeds the maximum allowed under Chapter 7. If that happens, you may not file as a couple and will have to wait until the divorce is filed to do it individually. That is why your divorce attorney and bankruptcy lawyer need to work together to find the best possible solution for you.