Though there are many factors, such as miscommunication and infidelity, that can lead to divorce, financial disagreements or struggles remain the top causes. While many might not know it, the high divorce rates in America often intersect with bankruptcy filings. If you’re in the midst of a divorce and Dallas bankruptcy, the emotional and legal stress can be overwhelming. By understanding how to handle a bankruptcy during a divorce, you can ensure the best financial situation for both you and your spouse.
Divorce and Chapter 7 Bankruptcy
Planning with your spouse during the divorce process can make both your divorce and your bankruptcy less complicated and more cost efficient. Of course, the details of your financial life will determine whether you should file for bankruptcy before or after the divorce itself. Here are a few considerations to keep in mind:
Court fees. Filing for bankruptcy with your spouse can save both of you a noticeable amount of money on court fees. Also, should you decide to hire a bankruptcy attorney, it will be much more cost effective to do so jointly rather than separately. However, should you file for a Chapter 7 or 13 Dallas bankruptcy with the help of a lawyer, be sure to make your attorney aware of the impending divorce, as there could potentially be a conflict of interests.
Chapter 7 filings are quicker. It’s much easier to file for a Chapter 7 than a Chapter 13. Because Chapter 7 eliminates unsecured debts, it can be completed shortly before a divorce. Keep in mind, though, that your income must be low enough to qualify for a Chapter 7. Filing jointly could push your income beyond the Chapter 7 eligibility threshold. On the other hand, the reorganization of debts through Chapter 13 complicates the process. If you need to file for Chapter 13 or aren’t eligible for Chapter 7, it would be better to file separately after divorce.
Allocation of debts. Litigating the debts to each spouse can be a complex process. Be sure to seek the help of a bankruptcy attorney during your Dallas bankruptcy to help you navigate these considerations.