Bankruptcy and Divorce: What to Know
Divorce can be an expensive process, adding to the stress you already face from its emotional impact. If you are considering filing for bankruptcy and for divorce, there are several things you should know:
- Don’t file for them both at the same time: It’s enough to have either a bankruptcy filing or a divorce to worry about — you should not put yourself through the complexity and stress of having to navigate them both at the same time.
- Your situation dictates which you’ll file first: Most people considering both bankruptcy and divorce will file for bankruptcy first, primarily because it puts an “automatic stay” into place that freezes your assets and prevents creditors from contacting you. This allows the bankruptcy court to get a better sense of what you own and owe. If you file for bankruptcy and divorce at the same time, that automatic stay could hold up the asset division process, drawing your divorce out for longer. All this said, some people choose to file for divorce first if they are not at all on good terms with their spouse.
- Know what to expect out of your divorce before filing bankruptcy: If you expect a quick divorce, Chapter 7 bankruptcy is ideal, because it eliminates all your dischargeable debts within just a few months. Compare this to Chapter 13 bankruptcy, which establishes a payment plan for you to pay off your debts over the course of years.
- Know that you cannot eliminate all debts in bankruptcy: You cannot, for example, discharge alimony or child support debts in bankruptcy, so if you’re filing for bankruptcy solely in the hopes of getting out of those payments, it’s not going to work.
For more information on what you should know about filing for bankruptcy and divorce, contact an experienced Long Island family lawyer with Bryan L. Salamone & Associates.