If you are considering a divorce, it is common to have financial stresses as well. As you are considering whether to file for divorce, you may be curious if you need to wait until after the divorce to file bankruptcy, or if you should file bankruptcy first. The entire situation may seem overwhelming and confusing, both legally and emotionally. Understanding the options you have when it comes to bankruptcy or divorce can help ease your mind, and help you make the best decision in your situation.
Bankruptcy or Divorce First?
These are all common questions and both will affect you financially and personally. A quick summary is listed below.
- When you file for bankruptcy, it is a personal matter, even if you are married. A bankruptcy will affect your credit score and your financial situation alone. Filing for bankruptcy will not impact your spouse or your spouse’s credit history in any way. You do not need your spouse’s consent to file for bankruptcy unless you make the decision to file jointly.
- Divorce. You may choose to file for bankruptcy after a divorce is finalized. If you make the choice to file for bankruptcy before a divorce, there may be more complicated legal issues involved, such as an “automatic stay” being placed on your finances. Additionally, filing for bankruptcy before a divorce could affect child support and alimony decisions.
While the bottom line is that you can file for bankruptcy at any time legally, there may be certain times that are more advantageous to you in your specific situation. Visiting with a family law attorney or bankruptcy attorney can help you make the best financial decision for your situation.
What About Filing for Bankruptcy in the Middle of a Divorce?
The other option is to file for bankruptcy in the middle of a divorce. There are circumstances where this option is necessary, and if a spouse decides to file a bankruptcy in the middle of the divorce, the court will place the divorce process on hold until they receive permission from the bankruptcy court regarding financial issues that would affect divorce decisions, such as the division of assets including stocks, bonds, or the family home.
Will I Have to Pay Child Support or Alimony If I File for Bankruptcy?
The short answer is yes. Any legally mandated child support or alimony will be considered non-dischargeable in bankruptcy. This means that the “debt” of child support or alimony will never go away if you declare bankruptcy after a divorce. As a parent, the court views that you are financially responsible for your child, and if you declare bankruptcy, your financial obligations to your children will remain the same. Child support and alimony are considered a priority under the law, and under Section 523(a)(5) of the Bankruptcy Code, you will be unable to remove yourself from the responsibility to pay these debts.
Contact an Experienced Attorney
Trying to make so many large life decisions such as divorce and bankruptcy at once can feel overwhelming. The Law Office of Dana Pechersky at 954.529.2057 can help you understand the best course of action for your situation, as we handle both bankruptcy and divorces. We can help you develop a plan for you and help you with your next steps. Contact us today for a free consultation.