Divorce and Bankruptcies: A Delicate Balance

Divorces are based around the division of assets and liabilities between two married people. It can be expensive and result in bankruptcy for participating parties, which makes things more complicated.

Filing for bankruptcy before or after your divorce can simplify the process. If you do it before, you can save a lot on court fees if you do a joint application. Plus, since you’re both bankrupt, you’ll have less assets and liabilities to apportion during the divorce. Filing for bankruptcy can also protect some of your property from being sold off for debt payments, though you may need to talk about how that property will be affected by the divorce.

Your First Meeting With a Bankruptcy Attorney

Filing for bankruptcy could be very complicated for someone who is not familiar with bankruptcy law. You might have decided to hire a bankruptcy attorney for this reason. While these attorneys are well versed in everything that has to do with bankruptcy, they can only do so much if their client does not provide them with all of documents they will need on their first meeting. Here’s a list of the essential paperwork you need to bring.    

        1 .       Originals and copies of financing documents. These documents should already be stowed away safely in a secure spot in your home. You need your loan agreement, insurance policies, title policies, deeds of trust, mortgages, security agreement and other like documents.

       2.       Names and contact information of guarantors, creditors and representatives of financial information. Your lawyer might need to talk to them as well so be sure to compile a list of these people beforehand and bring it to your meeting.

Collaborative Law Enables Amicable Divorce

Divorce is often associated with battling ex-spouses who have to resort to airing their “dirty laundry” in court to get the settlement they want. This does not always have to be case, however, and divorces don’t have to be acrimonious.

Through collaborative law, divorcing couples can resolve their differences without the court having to intervene. This involves both parties being represented by their own divorce attorney in Orlando. After each spouse provides all relevant information, such as annual earnings, both sides engage in negotiations over child custody and the like. Once a settlement is reached, the agreement is presented to the court, which then executes the terms and conditions.

Understanding Bankruptcy and Its Effects

Taking out a loan or financing is a widely accepted norm. In fact, credit card debt, auto, student loan and mortgage debt rose significantly in 2014 compared to the previous years. This fact also shows the potential number of people who might have problems paying back their debts. For many who have exhausted ways to do so, they can resort to filing for bankruptcy.

Bankruptcy is the process of eliminating or repaying a portion or a whole debt under the protection of the federal bankruptcy court. It can be accomplished either by liquidating a debtor’s property or by reorganizing the repayment agreement. These options are elaborated in Chapter 7 and Chapter 13 Bankruptcy. The court shall decide which should resolve a debtor’s financial obligation.

The Bankruptcy-Divorce Connection

Studies show that since 1997, there has been an increase in bankruptcy filings in the U.S., which are completely unrelated to business. In fact, financial problems are some of the main reasons for getting divorce in the country. If you find yourself facing both bankruptcy and divorce, you should consult an Orlando divorce attorney who is also adept at bankruptcy cases to know how to proceed.

Which Step to Take?  

Dealing with divorce induces enough stress, which could only increase if you have to file for bankruptcy as well. A bankruptcy attorney in Orlando might recommend that filing for divorce first is more ideal and practical since a state divorce court cannot proceed with division of property if a federal bankruptcy court is handling your case.