310.376.9865
- BANKRUPTCY – DIVORCE ?
- DIVORCE – BANKRUPTCY?
OK, you know things aren’t going good, when you are considering both divorce and bankruptcy. You will have to make a decision as to what to do first. Should you file the bankruptcy first, or should you file the divorce first.
Well, it depends.
First, you will have to determine if you are required to file a Chapter 13 Bankruptcy. If you are required to file a Chapter 13, you will have to determine if both husband and wife are required to support any plan payments. (However, you can divorce after the filing, as long as the plan payments are made the Chapter 13 will remain viable). There are a lot of moving parts with a Chapter 13 Bankruptcy, and what possible affect a dissolution would have on the bankruptcy proceeding, so before moving ahead it would be best to consult with an attorney to determine the best course of action.
If you do qualify for a Chapter 7 Bankruptcy you can consider the following:
- If you are still married, you can file jointly (even if separated) and pay one filing fee.
- If you file jointly, you can claim maximum exemptions allowed under the bankruptcy code. If only one party files, there is a chance that you may be limited in the exemptions allowed. (Without getting lost in the tall weeds, there are two different sets of exemptions schedules available to a debtor, one allowing for a large amount of equity in a house, and another one that allows a fair amount of exemption for any type of asset held by the debtor. If a married debtor fails to obtain a spousal waiver, he is only allowed the former set of exemptions, which might not be applicable for his needs).
- If you file jointly, both parties can wipe out/eliminate your unsecured debt. Caveat: Under some circumstances the Family Law Court may consider that the payor now has more discretionary funds to pay spousal support. (Any child support orders is based upon a formula.)
- If you are no longer talking, you may file bankruptcy without the consent of your spouse, eliminating your unsecured debt, however, again this may be considered in spousal support.
If your assets are minimal, and you can cooperate for a few months, you should probably file a joint Chapter 7 bankruptcy prior to filing for a dissolution, taking the assignment of debt issue off the table. However, every fact pattern seems to differ, and has to be analyze on its own.
DISCLAIMER: The content of this website is intended for informational purposes only. Nothing herein is intended to form the basis of an attorney-client relationship or constitute legal advice.
Los Angeles/Orange County Chapter 7 Bankruptcy Attorney- A Debt Relief Agency.
- Law Offices MJ Mann Bankruptcy Attorney
- 2706 Artesia Blvd, Suite BK
- Redondo Beach, CA 90278
- 310.376.9865
