Going through a divorce wile simultaneously needing the financial reprieve that can follow a bankruptcy can compound the loss, anger, and frustration you are already feeling. McGinn Law is uniquely capable of providing your assistance for your specific situation. Many of our cases are either family law or bankruptcy – so we can help you from all fronts of your divorce and bankruptcy. We can help you determine which to file first or whether it will be more beneficial for you to file for bankruptcy jointly and then completing the divorce once your discharge goes through.
Hiring a divorce attorney who also commonly handles bankruptcy can help you consider aspects of your situation like the scenarios below.
Discharging Marital Debts
It can be very costly and time consuming to settle which debts are the responsibility each spouse while in divorce court – divorce proceedings can be lengthier and costlier than bankruptcy.
Even if you do go that route, just because the court determined that your ex-spouse is responsible for a particular debt does not mean that your ex will follow through on keeping up with the payments. If the debt they were assigned was a joint-account, then you are still listed as a co-signer – and still technically responsible for paying that debt, regardless of what the court determined during your divorce.
This means that the creditor may contact you when the payments are missed in order to collect a payment and keep the account from going into collections. Technically, if you make the payment, you could attempt to legally seek reimbursement from you ex; however, you may have to take them back to court in order to successfully be reimbursed.
These risks and complications are why many find that it is in their best interest to file jointly for bankruptcy and have your combined debts discharged before finalizing the divorce.
Income Qualification For Chapter 7 Bankruptcy
In order to qualify for Chapter 7 bankruptcy, a joint couple has to use their combined income for the means test. If, together, you make too much then it may be easier to divorce and then file for bankruptcy so that you are able to qualify. Those who have a low combined income or lived off of a single income between the two may be able to pass the means test and still qualify to file for bankruptcy prior to the divorce. Even if filing for bankruptcy is ideal in order to eliminate your responsibility of shared debt, a couple may not be able to because of income restrictions.
Seek The Help Of A Bankruptcy Attorney
As you can see there are pros and cons to filing jointly or filing separately. To determine which route may be the best option for you and your spouse, contact our office for a free consultation.