A person’s life could change in dramatic ways when financial and personal matters converge. Dealing with bankruptcy could be a catastrophic situation to suffer through. As troubling and stressful as bankruptcy is on its own, things may become even more complicated when bankruptcy and divorce coincide. Financially troubled North Carolina spouses seeking to end their marriages may have no choice but to navigate both processes.
Divorce and bankruptcy become unavoidable
Do bankruptcy and divorce occur simultaneously? Filing for both bankruptcy and divorce is possible, but a court could set aside the bankruptcy until the divorce proceedings conclude. Often, couples may choose to go through one process before the other.
For many, there may be a decision to proceed with one process before the other. Whether a divorce or bankruptcy case goes forward first depends on individual factors. For some, filing for bankruptcy and completing that process first seems to be the appropriate strategy. Others may prefer to file for divorce, dissolve the marriage and then file for bankruptcy.
A joint bankruptcy could take place before a divorce, allowing both parties’ debts to be addressed. If the couple divorces, the court may divide the debts along with the assets. Then, the newly single individuals may file for bankruptcy after the final divorce decree. For some, dealing with a joint bankruptcy could be the faster, easier option.
Different bankruptcy options
Filing for divorce before bankruptcy may seem advisable when the couple qualifies for Chapter 7 bankruptcy. With Chapter 7, all debts end up canceled. Not every couple may be eligible for Chapter 7 as there are income and other possible requirements to meet.
Couples that file for bankruptcy together under Chapter 13 statutes may find their responsibilities commingled. Even if the former couple wants nothing to do with one another, the two individuals may need to deal with Chapter 13 payment plans jointly for some time.
Discussing the situation with a bankruptcy attorney may be advisable for those seeking advice on going forward. Making decisions about bankruptcy may become more complicated when also addressing issues related to divorce. An attorney could assist those struggling with the process.
