March 16, 2015

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. 

Also, filing for both at the same time would mean that you will be spending twice as much. A viable solution for this would be to instead file joint bankruptcy with your spouse before proceeding with the divorce. 

Chapter 7 or 13

There is a large chance you will be able to eventually settle all your debts and pull yourself out of bankruptcy. The right bankruptcy filing would be instrumental in a smooth settlement. A Chapter 7 bankruptcy could cancel much of your debt, but you may need to liquidate your nonexempt property and use the proceeds as payment. Chapter 13 bankruptcy, on the other hand, allows you to pay your debts under a repayment plan, with your monthly income as a source.

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