What Comes First - Bankruptcy or Divorce?
A couple are married for 17 years. The husband informs his wife that he has been unfaithful. They try but there is no way to save the marriage so they decide to divorce. They have no children. The husband has a good job and the wife retired early on disability. They struggle to keep up with monthly bills, both cars are financed and they are upside down on their mortgage. Their well-intentioned discussions about dividing their assets always end up in arguments over how to pay-off their debts and inevitably someone brings up the idea of bankruptcy. So in this situation what should they do? Should they file bankruptcy before they file for divorce? The answer is it depends.
Divorce and bankruptcy often go hand in hand. In some cases it may be best to file bankruptcy before divorce especially in situations involving joint property such as home mortgages, excessive credit card bills or insurmountable medical bills. By addressing their debt situation through bankruptcy, couples are forced to make key decisions about separating joint property which, in turn, sets the stage for an uncontested divorce to proceed swiftly. Bankruptcy may make sense when considering that one income which was sufficient for one household will likely have to support two households after the divorce. However, it is important to point out that the spouse filing for bankruptcy will be protected while the non-filing spouse may still be liable for any joint debts. This means that the non-filing spouse may be forced to file for bankruptcy also to protect him or herself. There are also significant income tax ramifications to explore when considering bankruptcy or divorce.
Hopefully the husband and wife will recognize the benefits of working together prior to the divorce so both parties can take advantage of fresh, new starts.
Let our divorce and bankruptcy attorneys analyze the facts of your situation. Each case is different, and what works in one couple's situation may not work for you, especially when you consider the tax impacts associated with bankruptcy or divorce. We will explore all of the available options with you so you can make informed decisions about how to handle your finances and your divorce. Our caring and compassionate attorneys have decades of experience with bankruptcy and divorce matters. We are uniquely equipped to provide you with comprehensive legal advice.
If you are ready to begin, call Smith Montgomery at (417) 881-9000 to make an appointment for your free first visit and evaluation. You can make your own appointment by using the Contact Form on our website. Just click and select a date and time that is convenient for you. Morning, afternoon and lunchtime appointments are available. Same day and next day appointments are no problem. Our automated appointments system means you don't have to wait for our office to open. You will receive an instant email confirmation of your appointment date and time. Start feeling better by turning over your legal matter to an experienced lawyer who wants to help you.
This article discusses bankruptcy and divorce in general terms only, and nothing in this article should be considered as legal advice. No attorney can guarantee the outcome of a case; however, if you have a legal problem, please take advantage of a free visit to review your situation. For decades Smith Montgomery has been helping people in Southwest Missouri make informed decisions about financial and family matters. If you need help deciding, see what our clients have to say about our legal services.