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D is for Divorce – Issues to consider before filing

Posted by Melinda Dionne | Jun 18, 2014 | 0 Comments

D is for Divorce – Issues to Consider before filing

Bankruptcy and Divorce

Bankruptcy and Divorce are very closely related; experiencing one often leads to the other. Sometimes, financial problems that are bad enough to lead to the filing of a Bankruptcy case can also result in the parties seeking a Divorce. Alternatively, when parties decide that their marriage is over, a Divorce can lead to the need to file a bankruptcy case on the part of one, or the other or both.

Things to Consider before pursuing either

There are a number of important items to know if you are considering filing either a Divorce case or a Bankruptcy case. Under Bankruptcy Law, only parties who are married at the time of the filing of their case can qualify for the filing of a joint bankruptcy case. Under current federal law, couples that do not meet the definition of married cannot qualify to file a joint bankruptcy case. Additionally, if the parties filed for a divorce first, and that divorce was granted by the Court, they can no longer qualify as married.

This can become a very important factor, particularly when it relates to the costs of filing. A couple that is still married as defined under current federal law (which includes common law marriages) can file a single case, pay one filing fee and generally pay the same attorney fees as an single individual would be charged. If the parties cannot qualify for a joint case, the costs of the two people filing separately will be considerably higher. Each party would have to pay a separate filing fee (which currently, and under chapter 7, is $335 each). Additionally, each party would pay a separate attorney fee because they are required to file two cases. As long as the parties are in a marriage that is legally recognized, they can file a joint case even if they are in a divorce case, if the bankruptcy case is filed before the final judgment of divorce is entered.

Costs and Expenses change after Divorce

Divorce cases often result in the parties filing a bankruptcy case because they are now bearing the expenses of two households, usually on the same overall income that the parties had when they were together. It does not take a mathematician to recognize that two households are going to cost considerably more money than one household, the result of which is that either or both parties may no longer be able to meet the payment requirements on their debts. Divorce will often lead to one party having to pay child support, which can cripple an already faltering budget. One answer for these parties is the filing of a bankruptcy case. If you are considering filing for divorce and have, or anticipate having, the inability to pay your debts, you may wish to factor into your analysis the possible need to file a bankruptcy case together, prior to the final judgment of divorce being entered.  Getting along long enough to resolve your financial problems while still married can save you both a lot of money and simplify the divorce process.

Talk to an experienced Bankruptcy Attorney

A candid discussion of the possibility of bankruptcy or divorce with your attorney can help you reach the best outcome in either a divorce or a bankruptcy case, and can go a long way to putting you on the best footing when it's over.

About the Author

Melinda Dionne

My name is Melinda Dionne.  For over 35 years, I have been helping people find a way to deal with overwhelming debt.  I have never represented a deadbeat because the vast majority of people having financial problems are anything but deadbeats.

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