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Understanding Bankruptcy And Divorce
Financial troubles and marital discord often go hand in hand. Many couples, and individual spouses consider the need to obtain meaningful debt relief as they face divorce. In times like these, emotions can run high, making it difficult to step back and put together a strong plan of action to conquer debt concerns.
When divorce and bankruptcy happen simultaneously, many issues can become more complicated. Speaking with an experienced bankruptcy attorney before filing for bankruptcy and divorce can help you avoid complications and unintended consequences.
The Overlap Of Bankruptcy And Divorce Can Create Complications
Bankruptcy relief is a time-honored system for individuals and married couples to obtain a fresh financial start. In any divorce proceeding in Oregon, the soon-to-be ex-spouses must divide marital property and debts. If you are going through bankruptcy and divorce, it is important to consider how to time each to avoid unintended consequences.
At The Law Office of Kim Covington in Eugene, I focus exclusively on helping people conquer debt problems. Many people ask if it is better to file for bankruptcy before filing for divorce, or vice versa. There is no simple answer to that question that applies across the board. I can review your financial structure and the nature of your debts and advise you about your legal options and the possible effects that will apply to your circumstances.
In some situations, filing a joint bankruptcy petition before filing for divorce is highly beneficial. Eliminating debt through Chapter 7 bankruptcy is a streamlined process. With debts relieved, property division and debt allocation in divorce can be simplified. If you do not qualify for Chapter 7, however, the bankruptcy process may complicate the divorce process. Bankruptcy creates an automatic stay that applies to your assets and debts. The family court may not be able to finalize property and debt division concerns in the divorce until the bankruptcy court lifts the automatic stay.
It is critical to understand that the bankruptcy process applies to your obligations with creditors. The family court views debts that have arisen during the marriage as marital debt, regardless of whose name is on the account. A bankruptcy discharge does not apply to the distribution of debts in the divorce decree. If you receive a bankruptcy discharge after your divorce, the family court order may obligate you to pay a debt from a joint account on behalf of your ex-spouse, even if your personal obligation to the creditor has been discharged in bankruptcy.
Domestic support obligations such as child support and spousal support are not subject to the bankruptcy order of discharge.
Get Personalized Guidance From A Skilled Bankruptcy Lawyer In Eugene
Each case has its own unique nuances that require detailed bankruptcy relief analysis. To learn more about how the timing and effect of filing for bankruptcy will apply to your individual circumstances, I invite you to arrange a free consultation. Call 541-393-2790 or 800-673-1891 or contact me online now. I offer flexible scheduling and affordable rates.