Divorce and Bankruptcy. How Is That Handled?
Bankruptcy attorney Keith Cornwell of the Cornwell Law Firm is always on hand to offer advice about divorce and bankruptcy. He can advise you whether it is better to file for bankruptcy before or after divorce. It is crucial that the bankruptcy petition is filed at the right time, especially since state divorce courts will not be able to make decisions about your property for as long as the federal bankruptcy court is in control of it. Divorce courts will still be able to make rulings on alimony, child support, visitation, and custody while your bankruptcy is in progress. Thus, individuals must also consider the nature of the debt and the distribution of the joint assets with their attorney to make a decision.
Should You File for Bankruptcy before Divorce?
Under certain circumstances, it is effective to file for bankruptcy before a divorce. However, choose the right bankruptcy attorney such as Keith Cornwell and you may be able to wipe-out a percentage of the debt, the debts that would normally be divided between the two people concerned. This will make the divorce easier. However, it is worth considering that you and your spouse could file for bankruptcy before you commence divorce proceedings. This may prove beneficial as it can entitle you to retain property and reduce fees.
Filing for Bankruptcy after Divorce
Under certain circumstances, it may be better to halve the marital property prior to a divorce. Many who reside in Gwinnett County and neighboring regions find their debts begin to spiral as they are forced to live off only one wage. In many cases, the parent who is granted custody of the children soon beings to drown in debt. They may receive alimony or child support, but these payments may be insufficient. Bankruptcy is a way to resolve the money problem and put life back on track.
Joint Debts Will Not Disappear
If your divorce decree orders you to pay certain debts, you might consider filing for bankruptcy to eliminate those debts. Sure, the creditors will not be able to come to you for payments once you’ve filed for bankruptcy after a divorce, but they can still go after your ex-spouse for payments that you’ve signed for together in the past. Your ex-spouse can take you back to divorce court so that they don’t have to pay off the debts you were ordered to take care of. In most cases, the court will order you to pay your ex-spouse back. This means you’ll have to pay off the debts no matter what you do.
Not Everything Will be Eliminated
If you have been ordered to make payments to your spouse in exchange for any property, Chapter 7 bankruptcy will not wipe this debt away. However, Chapter 13 will enable you to utilize a payment plan. Chapter 13 bankruptcy allows you to give your trustee extra income each month. Once your bills have been paid, your trustee will distribute the money to your creditors and ex-spouse. When your Chapter 13 plan comes to an end, if you still owe your ex-spouse any money, that portion will most likely be eliminated.
Child Support and Alimony
All courts take child support and alimony very seriously. When you still owe your ex-spouse alimony or child support that is past due, you will not be able to erase your debts in Chapter 7 or Chapter 13 bankruptcy. The bankruptcy court will not give you a Chapter 13 discharge to finalize your case if you still owe past-due child support and / or alimony.
Contact a Gwinnett County Bankruptcy Attorney
If you are experiencing any of the above difficulties you should contact bankruptcy attorney Keith Cornwell of the Cornwell Law Firm. He will help you to form an effective financial plan. If you wish to discuss divorce, bankruptcy or both, give us a call today. We are a reputable debt relief agency who helps citizens file for bankruptcy.
Call us today at (404)791-4449 or simply fill out our contact form.