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Bankruptcy and Divorce: What Should I Do?

Bankruptcy and Divorce

Bankruptcy Attorney in St. Charles, Missouri

Are you planning to go through a divorce, but you are at the same time conflicted with unmanageable debts? If so, you may have pondered about the possibility of declaring bankruptcy, but you could be apprehensive since you don’t know anything about bankruptcy and how your divorce would influence your bankruptcy case.

Dealing with the divorce is already draining your emotional reserves, but when you combine that with debt collectors who relentlessly pursue the debt you owe, this might cause emotional distress to you and your spouse. Nevertheless, whichever is your situation, our bankruptcy lawyers in St. Charles, Missouri are available to provide legal assistance and representation.

Our family lawyers have years of knowledge and experience with bankruptcy cases like yours. They are well-versed in Bankruptcy Law and the Bankruptcy Code, and they know when and under what chapter of bankruptcy you should file. So, if you’re looking for a fresh start, begin by contacting us.

What is Bankruptcy?

Bankruptcy is a way that most people use when they have unmanageable debt, whether they are a person, a couple, or a group. Bankruptcy is a legal recourse that one could take in order to wipe out their debt. 

A court usually supervises bankruptcy cases through the bankruptcy trustee. Every bankruptcy case has a bankruptcy trustee who will evaluate and provide recommendations for your case.

You may pay off your creditors in a variety of ways through bankruptcy. This can be accomplished by liquidating your nonexempt properties or by establishing a repayment plan.

Types of bankruptcy

Chapter 7

This is sometimes referred to as a liquidation bankruptcy. In this type of bankruptcy, your properties will be rounded up and liquidated. The money you generate from selling your properties will be utilized to pay off your creditors.

In general, people who earn below the median income in their state and those who have undergone credit counseling will be qualified to file for Chapter 7. Remember that all domestic support obligations that become due after the bankruptcy is filed must be paid in full by the debtor.

Chapter 11

This type of bankruptcy is most commonly used by businesses in order to keep the business running and pay creditors at the same time. Individuals are also allowed to file for Chapter 11 bankruptcy, but it is a costly and complicated process.

Chapter 13 

Under this chapter, your property will not be liquidated; instead, you and your creditor, with the court’s approval, will devise workable debt repayment plans in which you will pay in installments.

When to file for bankruptcy? 

You and your partner are greatly in debt but you want to get a divorce. However, you can’t decide if you should get a divorce first, then file for bankruptcy, or the other way around. 

Most of the time, a married couple will file for bankruptcy jointly (before divorcing), doing so will discharge both spouses’ debts and decrease filing and court expenses. However, there are occasions where one of the spouses files on their own. Both of these options are valid, but before determining whether to file as an individual or as a couple, you must comprehend the various consequences.

Option 1: Bankruptcy before divorce

Some married couples have preferred filing bankruptcy first before they go through the divorce. Why is that? Because filing for bankruptcy jointly by a married couple can wipe out some of their marital debts.

However, when you do the opposite, any marital debts accrued during your marriage will be shared between the two of you after a divorce; consequently, you have to pay it individually in your separate bankruptcy cases.

Furthermore, in many states, couples pursue filing for bankruptcy before divorcing because they can keep a big chunk of their assets compared to when they filed for bankruptcy separately after their divorce.

However, it should be emphasized that in bankruptcy, there are certain debts that cannot be erased (discharged), such as income tax debt, restitution, student loans, and so on.

But how about those debts that are intended to support either the spouse or their children?

All debts – stipulated under a marital settlement or a divorce decree – that are for the support of either the spouse or their children will not be discharged in bankruptcy. They really go to the front of the queue, taking precedence over practically every other type of debt to save the bankruptcy trustee’s costs.

Remember that cooperation between the spouses is needed when they wish to file for joint bankruptcy. Otherwise,the bankruptcy process may get more complicated.

 Option 2: Divorce before Bankruptcy

If you find yourself in a situation where your spouse is filing for bankruptcy alone, you will be protected under the law-at least for support-related debts. 

Sometimes, this is sought by a married couple because of the difference in their financial condition. For example, one spouse may have a good credit score while the other has accrued significant debt. Of course, no one wants their credit to suffer, which is why, in many cases, individual bankruptcy will discharge the qualified debt of the indebted spouse without harming the properties and credit score of the other spouse.

Furthermore, some states prohibit joint filers from doubling exemption amounts in a joint petition. This means that it is more beneficial to file bankruptcy individually. 

Nevertheless, whichever you choose, you should keep in mind that getting the help of an attorney that has years of experience in bankruptcy and family law will help you choose the best option for you.

Call today for a Free Consultation

When you’re in debt, it’s difficult to focus on anything else. But there are steps that you can take to get out of debt – even if your credit is damaged or your income has been cut off completely! Call our St. Charles bankruptcy attorneys at Westbrook Law Group to find out how to escape the shackles of debt and get relief in Missouri.

How can a Westbrook Law Group Missouri bankruptcy attorney assist you with your divorce and bankruptcy?

If both bankruptcy and divorce collide, then expect that both might become far more complicated and difficult to manage.

In a divorce, there are a lot of things that one should consider, like child support, child custody, and division of marital property, while on the other hand, in bankruptcy, the prospect of having nothing at the end may be frightening.

No one wants to be broke after going through both, and no one wants their future and their children’s future to be jeopardized. That is why seeking legal assistance from an experienced bankruptcy attorney gives you a sigh of relief.

Our St. Charles Bankruptcy Attorneys can help you:

  • choose and evaluate the type of bankruptcy you can file,
  • know when is the best timing to declare bankruptcy,
  • sort out your debts into unsecured debt and secured debt,
  • assist you in not being duped by anyone,
  • help you in determining which properties you may preserve

Our lawyers have years of experience in dealing with cases like this. They have gone over the Bankruptcy Code and other laws several times. They make certain that when they help you, they are able to provide you with the highest quality service that you need.

Furthermore, being a well-established law firm dedicated to debt relief, the resources required when filing for bankruptcy are readily available.

Of course, you want the best a bankruptcy lawyer has to offer. You want them to be well-rounded and capable of dealing with any unforeseen events, and that is what we provide.

Our years of expertise with bankruptcy laws have helped us learn what we need to have in order to assist our clients efficiently.

Call our St. Charles Divorce Attorney Now!

You may feel helpless and drained if you are going through a divorce and bankruptcy. You may be concerned about the prospect of your and your children’s futures being hung by a thread. All of these are reasonable concerns, and we want you to know that you don’t have to worry or be alone because we are here.

As a debt relief law firm, we have dedicated ourselves to giving our clients the quality service they deserve. In our years of experience, we have learned the dos and don’ts in the bankruptcy process. This improved our ability to assist our clients with their bankruptcy. So, what are you holding out for? Begin your debt-relief journey with us by scheduling a free consultation with one of our attorneys.

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