Divorce is one of the most stressful situations you can ever go through in life. Bankruptcy is another set of circumstances that is nearly as dreadful in impact. Filing for divorce and bankruptcy at the same time compounds your stress far more than you might think. Knowing some tips about this rare convergence of personal tragedies can help you navigate the nightmare.
Should I File for Divorce and Bankruptcy Simultaneously?
The most common question about divorce and bankruptcy is whether to file for both at the same time. It is not recommended to file for divorce and bankruptcy at the same, assuming you can possibly avoid it. The process of bankruptcy will freeze a lot of your debts and assets. Many of your assets will be used or sold off to pay applicable creditors, and this freeze would put the divorce process on hold since it's largely about dividing assets between a couple.
How Many Attorneys Should I Hire?
You should be prepared to hire multiple attorneys including one that specializes in bankruptcy. Even if you and your spouse agreed to the same attorney to navigate your divorce together, filing for bankruptcy means you might need an attorney of your own. The same attorney can't represent both of you if you are filing for bankruptcy because there would be a conflict of interest with their other client, your soon-to-be former spouse.
How Does Bankruptcy Affect Marital Obligations?
Bankruptcy won't shield you against marital obligations. Some people file for bankruptcy in relation to their divorce thinking it will get them off the hook for certain financial obligations, but this isn't the case. Bankruptcy won't protect you from things like child support, student loans, and alimony.
Should I File For Bankruptcy Before or After a Divorce?
Filing for bankruptcy first typically makes more sense. If you need to do both bankruptcy and divorce, then filing for bankruptcy first might make sense in most circumstances. It will simplify your financial picture before the process of asset division. There might even be benefits for your spouse in an amicable split. If communications are still good between the two of you, it's worth having a conversation or two to see how they feel about the options available to you.
Should I File for Chapter 7 or Chapter 13 in a Divorce?
There are many kinds of bankruptcy, but Chapter 7 might prove ideal before a divorce. The Chapter 7 bankruptcy process frequently only takes about six months. It's just that much faster, meaning everyone can move on with the next chapter of their lives and put all this behind them. With Chapter 7, your divorce won't stay hanging over your head any longer than needed.
If you’re going through a divorce and are looking to file bankruptcy in Michigans, Moran Law is here to help. Contact us today - our Michigan bankruptcy attorneys will help you get through this difficult time and give you a fresh start.
