Can Bankruptcy And Divorce Occur Simultaneously?
Some couples’ relationships improve after one of them files for divorce; they are relieved that they can move on with their lives separately without getting on each other’s nerves about every little thing, and they can transition to treating each other as friends or extended family members without having to fight about money. Unfortunately, your ex-spouse might be the kind whose mean streak only comes into full view after you file for divorce. People in the process of divorce do all kinds of things to cause their estranged spouses as much stress as possible, from going Instagram official with a new relationship the day after the divorce papers are filed to making parenting decisions that are sure to cause conflict. If your ex tells you they are planning to file for bankruptcy, don’t panic. If they talk about it in the context of trying to sabotage your finances or kicking you out of the marital home, it is an empty threat; bankruptcy courts try to avoid causing disruption to the children and former spouses of debtors. If they are filing bankruptcy because your income and cash gifts from your parents were the only thing helping your ex stay a step ahead of the creditors, then their bankruptcy filing will not have a major impact on your finances. If you and your spouse are in the middle of a divorce and your spouse files for bankruptcy, it is more of an annoyance than a disaster. To find out more, contact a Plantation bankruptcy and divorce lawyer.
Bankruptcy and the Marital Home
No one can stop you from filing for bankruptcy, not even your spouse or the family court; federal law gives every debtor the right to file for bankruptcy protection. When you file for chapter 7 bankruptcy, your property becomes the property of the bankruptcy estate, which can sell some of your assets in order to settle your debts. If you are married, even if you or your spouse has filed for divorce, this means that the bankruptcy court has first dibs on your marital property. While chapter 7 bankruptcy cases can be relatively quick, they make divorce cases feel interminable, because the family court cannot divide the couple’s marital property until the bankruptcy case is finished.
In a chapter 7 bankruptcy case, the debtor and the court agree on which assets are exempt from liquidation. The family home is almost always an exempt asset. In fact, many chapter 7 bankruptcy cases finish without the debtor having to sell any assets.
Bankruptcy and Child Support
Whether your ex files for chapter 7 or chapter 13 bankruptcy, and whether they file while your divorce is pending or after it is finalized, none of this will make your ex’s child support obligations disappear. Bankruptcy courts do not discharge alimony or child support debts; only a family court can order a retroactive modification of alimony or child support.
Contact a South Florida Bankruptcy Lawyer About Your Financial Future
A bankruptcy and divorce lawyer can help you look at the big picture about your finances if you are considering a bankruptcy filing while your divorce is pending. Contact Nowack & Olson, PLLC in Plantation, Florida to discuss your case.