A thoughtful, measured strategy for your bankruptcy can help you in a number of ways when a divorce seems inevitable or is already underway. A good plan can help ease tension between yourself and your spouse, for example, by reducing fights about who is responsible for this or that bill. Not only is this expensive, aggravating, and likely to sour an already acrimonious process, it may be completely unnecessary. You may find that bankruptcy can get rid of those bills altogether! Thus, there will be no need to assign a bad guy.
If you have already finalized the divorce, bankruptcy is often the best way of getting back on track financially. Chances are, you will emerge from your divorce with a significant amount of secured and unsecured debt. Bankruptcy allows you to let go of those items you can no longer afford with one income. If you simply allow the car to be repossessed, or the mortgage to be foreclosed, you will still be responsible for the deficiency balances after the car or home is sold. This is the worst possible scenario- not only have you lost the car or home, but you're still on the hook for the underlying debt. Surrendering the home or car in a bankruptcy shields you from any remaining personal liability, and frees you to transition to a new lifestyle.
If you're still in the preliminary stages of your separation, it may be tempting to postpone thinking about bankruptcy until after the divorce is totally settled; why deal with two stressful legal procedures at once? The answer is that with a good bankruptcy attorney and a good strategy in place, you can make a bankruptcy work for you and your future ex. Even if you and your soon to be ex-spouse disagree on every other issue, try to agree on bankruptcy as the best way to wrap up and dissolve the marital debt. If you are legally separated but not divorced, you can file a joint Chapter 7 petition, receiving your discharge in a matter of months. This can free you to focus on the truly important issues of your divorce, such as custody and visitation. Of course, in some instances, filing and completing the divorce before filing for bankruptcy is the best option, and this is why consulting with an experienced bankruptcy attorney early in the divorce process is important. Only an attorney can assess your unique situation to determine the best strategy.
Both bankruptcy and divorce can be stressful processes, so you should always exercise your power to save yourself aggravation where you can. Don't make these life events more difficult than they have to be, and remember that only you can take control of your financial future.
The attorneys at the Law Offices of John T. Orcutt have years of experience helping families deal with the financial challenges of a divorce. Call us today for a free initial consultation. +1-919-646-2654.