Divorce is caused by many reasons, the least of which is not financial trouble. In turn, many couples file bankruptcy as a result of a divorce. A crumbling marriage that is likely irreconcilable based on reasons that include an overwhelming amount of debt may benefit greatly from bankruptcy. Especially, by both spouses filing bankruptcy prior to the inevitable event of divorce.
In the context or setting of divorce, filing bankruptcy allows couples to conclude and erase a significant, perhaps rocky, financial chapter of their life. It allows former spouses to end their financial relationship and return to single life – with a fresh start.
The key to taking advantage of bankruptcy, coupled with a divorce, is proper planning. This ensures that the bankruptcy filings are more cost-effective and less complicated.
Filing fees for chapter 7 and chapter 13 bankruptcy cases are the same for individual and joint filings. Thus, if the spouses file jointly before the divorce, they will reduce their bankruptcy filing fees by half.
If a spouse in the midst of financial turmoil files for divorce prior to the filing of a bankruptcy case, both spouses must then resolve the continuing responsibility and payment of all of their debts in the divorce case. Any time spent negotiating and settling the payment of these obligations with the assistance of their divorce attorneys will certainly take time and cost money.
Spouses on the brink of divorce must be aware that a divorce decree ordering only one spouse to pay a marital debt does not terminate the obligation of the other spouse to pay the debt.
The filing of a bankruptcy case BEFORE divorce solves these problems.
Once the wheels of divorce begin to turn, even at the initial stage, both spouses start to go their separate ways and tend to make decisions that are in their self-interest. This is really nothing unusual. An example of this is a spouse who files bankruptcy after divorce.
When this occurs, if the parties are on speaking terms and treating each other respectfully, it is often a good idea for the filing spouse to inform the other spouse about the bankruptcy filing. It may also be a good idea if the filing spouse recommends that the other spouse also file bankruptcy.
Actually, it is an excellent idea if the other spouse also files bankruptcy at the same time. Otherwise, if the other spouse does not file, unlike the filing spouse, he or she will be responsible for paying any debts for which the marriage remains responsible.
If a divorce decree orders that one spouse remains liable for a debt, and this spouse fails to pay the debt, anything that follows that is an attempt, legally or otherwise, to compel the payment of this debt, will likely result in additional legal fees. In the end, it will cost one spouse time and money.
Not only is divorce an unfortunate end to a relationship, but it may also impose financial burdens on both spouses long after the decree is signed. As a result, it is in the best interest of both spouses to file bankruptcy and eliminate all community, marital, and joint debts before a divorce.
If you have any questions that require immediate answers or if you are in need of assistance in reviewing and thoughtfully considering your options when experiencing financial hardship and divorce, the Morrison Law Group is here to help you. Why should you consider the Morrison Law Group? We are passionate about helping people. The team of attorneys and staff at the Morrison Law Group cares about its clients. We strive for complete client satisfaction.
The Morrison Law Group can help if you’re facing financial turmoil and the end of your marriage. The Morrison Law Group can help if you just need to talk about your Chapter 7 or Chapter 13 bankruptcy options at a difficult time. Call 801.456.9933 today to schedule a FREE consultation. We have locations in Ogden, Logan, Sandy, and St. George to serve the residents of the counties of Weber, Cache, Salt Lake, Utah, Morgan, Davis, Washington, and surrounding areas.