If you are facing the prospect of both divorce and bankruptcy, you are certainly heading for a world of difficulty. Both events involve court proceedings and lots of paperwork, time, and worry.
One thing you may be wondering about is your timeline: specifically, if you know you will be filing for both a divorce and bankruptcy, should you plan to file one before the other?
Marital and financial troubles are two very emotionally taxing affairs, so anything you can do that will ease the stress and pain you’ll feel could be worth researching.
Should You File for Divorce Before or After Bankruptcy?
Whether you file first for bankruptcy or divorce will depend upon a variety of factors, such as what plan you’re filing for, how much property you have, and how much debt you have. As far as the plans go, among other factors to consider, each plan has a very different timeline. A Chapter 7 bankruptcy is a discharge of debts, and usually only takes a few months. A Chapter 13 bankruptcy, however, involves developing a repayment plan and takes three to five years to complete.
Property and Your Spouse
If you and your spouse own property, it might work in your favor to file for bankruptcy before you file for divorce. You can keep your property in a bankruptcy via an exemption. What’s more, in Ohio, you are allowed to double your exemptions if you and your spouse file for joint bankruptcy, which is certainly beneficial if you own a lot of property.
Debt and Your Spouse
One of the most time-consuming aspects of a divorce is dividing debts among each spouse. What’s more, assigning a joint debt to one spouse does not leave the other spouse completely off the
hook. For example, if your ex-spouse was assigned payment of a joint credit card balance in your divorce and he or she doesn’t pay or files for bankruptcy, the credit card company will come looking for you for repayment. If, however, you and your spouse file for bankruptcy before divorce, you may be able to wipe out these debts so neither one of you will have to worry about them.
Joint Income vs. Single Income
It may seem like filing for bankruptcy as a couple is a no-brainer. However, that is not always the case. If you and your spouse file for joint bankruptcy, you need to make sure your combined income is not so high that you appear to have more money than debts; in fact, if you income is too high, you may not qualify for bankruptcy. If you and your spouse decide to file for divorce first, then you will be able to establish your own residency and lower your income, making your chances for a bankruptcy discharge greater.
Do You Have Questions About Bankruptcy and Divorce? We Have Answers.
Deciding whether to file first for bankruptcy or divorce can have many consequences, and you may not feel confident that you are making the right choice for your particular situation. Luckily, you don’t have to worry: contacting the Ohio bankruptcy lawyers from Luftman, Heck and Associates is your first step towards determining the best outcome of your case.
The bankruptcy attorneys at Luftman, Heck & Associates are ready to listen to your needs and provide sound advice and direction. Call us today for a free consultation at (216) 586-6600, or send an email to email@example.com.