When you are facing financial problems, you are more than likely to experience family issues. For instance, your marriage will be affected when you lack money. Additionally, child support may be significantly affected when your earnings are low. Therefore you may find yourself in a situation whereby you want to file for bankruptcy and divorce. Once you file for bankruptcy, it may become challenging for you to survive on one income as you have been used to depending on two income sources. Therefore if you are experiencing financial problems, seek legal help from a bankruptcy attorney.
At Los Angeles Bankruptcy Attorney, we are here to help you solve your financial crisis. If you are in or around Los Angeles, CA, call us today and speak with our bankruptcy attorney. Our competent attorneys are familiar with family and bankruptcy laws.
Divorce and Bankruptcy
In most cases, bankruptcy and divorce coincide. It becomes challenging to adjust to one source if you are used to depending on two income sources. Sometimes you may feel like things are falling apart when you are filing for bankruptcy, and the other spouse is busy filing for divorce. However, with the guidance of an attorney conversant with both family and bankruptcy laws, he/she will guide the whole process. In a bankruptcy and divorce case, each spouse focuses on receiving an equal share of assets and debts. It won't sound okay when one spouse is tied to all obligations which were jointly acquired. In most cases, the California courts call for mediation between the two spouses and their attorneys.
If you plan to file for bankruptcy and divorce, it's critical to understand that your decisions will significantly impact the process. For example, the time you file for bankruptcy will have an impact on the outcome. Filing for bankruptcy before or after divorce will bring different results. Additionally, if you file for bankruptcy, you will affect the exercise of property division and share the debts during the divorce process.
According to California laws, every spouse is liable for the debts accumulated during the marriage. It doesn't matter the spouse who accumulated the debts during the marriage. That means even after you file for divorce, you will be held responsible for the debt obligation. Therefore, even when one spouse is allocated debts after divorce, the agreement will not relieve the other spouse from the debt obligation. Note that the creditors are not aware of the deal you make during divorce. Therefore the creditors may come for you for failing to repay your debts after a divorce.
For instance, you and your spouse may have acquired a credit card together. However, when you file for divorce, the court holds one spouse liable for paying back the credit card debt. Note that the creditors will see both you and your spouse responsible for making payments for the credit card debt since the court is unaware of the agreement you made during a divorce. That means if the spouse liable for the credit card fails to make payments, the creditors will come for both of you.
Can You File for Bankruptcy Before Divorce?
A married couple may decide to declare bankruptcy before they file for divorce. When you file for bankruptcy before the divorce, you will be able to cancel the joint marital debts, which could otherwise be divided as part of the divorce proceedings then handled separately in each partner's bankruptcy. After the bankruptcy court discharges several debts, the spouse will have a few obligations to divide at the divorce proceedings. Therefore the couples will have a few debts jointly responsible after divorce.
After you choose to file for bankruptcy before filing for divorce, you will avoid fighting to allocate debts during the divorce proceedings. By doing so, the divorce process will be very efficient. Sometimes the situation may be unique, and filing for bankruptcy before the divorce becomes next to impossible. Therefore, if you consider filing for bankruptcy before a divorce, you should seek legal assistance from an attorney. Notably, choose an attorney experienced in tackling both family and bankruptcy laws. The attorney will evaluate the uniqueness of your situation and provide the best legal advice.
What Happens When You File For Bankruptcy and Divorce At the Same Time?
Bankruptcy and divorce are among the most stressful and emotional experiences which you can endure. Therefore dealing with both of them at the same time may be overwhelming. Before you put bankruptcy and divorce into motion, you need to understand it will be unlikely for the two proceedings to coincide. Although you will file the two legal motions together, in most cases, one case will take precedence over the other. If the two cases are pending simultaneously, the bankruptcy case will be suspended for the divorce court to apportion assets and marital debts to each spouse.
If you juggle the two legal processes at the same time, you will complicate your situation. Therefore for simplicity, you should consider filing for divorce before you tackle the bankruptcy case. However, it will be more desirable to file for bankruptcy under certain situations and later handle divorce. Notably, your financial situation and the jurisdiction laws in your residential area are key in deciding the best way to tackle divorce and bankruptcy. Therefore, you will need to consult legal counsel from your attorney before you start the process for your situation's best order.
If you and your spouse are on amicable terms, it would be recommendable to file for bankruptcy and then divorce. For instance, if you file for bankruptcy before the divorce, you will share the costs of hiring a bankruptcy attorney. Additionally, you will share the filing fee and avoid joint debt payments. Therefore if both you and your spouse own property together, it will be advantageous to first file for bankruptcy then divorce.
Sometimes your joint earnings may be higher than the threshold for filing bankruptcy under chapter 7. However, if your earnings qualify for chapter 7, you may choose to declare bankruptcy after divorce.
Filing a Joint Petition
A married couple may file official bankruptcy paperwork together. The couple will submit paperwork containing financial information for both spouses. If you are a divorcing couple, filing for bankruptcy jointly may be more efficient. You will enjoy the following benefits:
- Fewer costs for filing bankruptcy as opposed to filling apart.
- The bankruptcy court discharges some debts for both spouses.
However, married couples aren't obligated to file for bankruptcy together. Each partner may find it easier to file for bankruptcy after divorce because of the drop in finances.
Bankruptcy and Divorce Costs
The bankruptcy filing fees are the same for individuals and joint spouses. Therefore if you file a joint bankruptcy with your partner, you will save many legal fees. Additionally, hiring a bankruptcy attorney for joint bankruptcy is much cheaper than when you filed separately. Notably, inform your bankruptcy lawyer to be aware of the upcoming divorce to avoid conflicts of interest when representing you, your spouse, or both of you. If you file for bankruptcy before the divorce, you will simplify any issue about property division, debt and lower the costs incurred due to divorce.
Chapter 13 Vs. Chapter 7 Bankruptcy
When deciding to declare bankruptcy, you may choose between chapter 13 and chapter 7. A chapter seven bankruptcy is designed to do away with your unsecured debts like credit card and medical bills debts. Under chapter 7, you will receive debt discharge after a few months. Therefore you may complete the process before the divorce.
Alternatively, chapter 13 will take up to five years since the bankruptcy law requires you to pay portion or all debts through a debt repayment plan. Therefore if you want to file bankruptcy under chapter 13, it would be wise to file separately after your divorce since it takes an extended period to complete.
In case you filed for chapter 13, you may cancel the bankruptcy and plan for divorce first. Note that canceling or stopping chapter 13 won't eliminate your debt responsibility. If you choose to reconstruct the repayment plan, you will have two plans. You will bear one debt repayment plan, and your spouse will bear the other repayment plan. Therefore after dividing the repayment plan into two, you will handle the bankruptcy independently.
The process of handling bankruptcy and divorce may be intricate. Therefore if you don't handle the exercise correctly, you may take a longer period than necessary. So you should seek legal help from a bankruptcy attorney. The attorney will first evaluate your situation and pursue the best action for your case.
Discharging Marital Debts
Litigating the debts to be assigned to each spouse during a divorce may be time-consuming and costly. Additionally, when one spouse is ordered to pay a particular debt in a divorce, it doesn't change the other spouse's obligations towards that specific creditor. For instance, the bankruptcy court ordered your ex-husband in a divorce to make payments of a credit card you had together. If the ex-husband fails to make a payment, you are still responsible for the debt, and the creditors may even come after you. However, if you repay the debt, you have the right to be reimbursed by the ex-husband since he has violated the bankruptcy laws.
After filing for Chapter 7 bankruptcy, the bankruptcy court discharges several debts. However, the court won't release a few debts after you file for bankruptcy. So you will have the responsibility to repay the non-dischargeable debts. The non-dischargeable obligations include:
- Court fines and penalties
- Child support
- Attorney fees majorly for child support or any other support case
- Student loans
- Fines are payable to the state or government agencies and entities.
Apart from the non-dischargeable debts, the bankruptcy court may prevent certain debts from being dismissed even after you file for chapter 7. Note that discharging debt isn't a right but a privilege. Therefore sometimes, the bankruptcy court may not grant you the privilege. For instance, the court may deny you the privilege when you:
- Violate court order
- Fail to present your tax records as required
- Destroy your financial books and records
- Hide specific property with the aim o tricking or defrauding your creditors
- Commit perjury about your case
Several rules govern the discharge of debts after declaring bankruptcy. Therefore you may not understand and interpret all bankruptcy rules. It will be crucial to seek legal help from a bankruptcy attorney. The attorney will assess your case and provide advice about the dischargeable debts.
What Are the Effects of Filing Bankruptcy on Child Support?
By declaring bankruptcy, you skip the duty of paying debts as you reconstruct your repayment plans. You will discharge most debts and keep creditors from collecting your property. However, child support will be excluded from the bankruptcy exercise. The law requires both spouses to care about their children financially. The court is very strict on this law and cannot relieve the parents from the obligation.
If you are making payments for child support and consider filing for bankruptcy, you may need to know filing for bankruptcy will impact the child support responsibility. Alternatively, if you are the spouse receiving child support and the other parent paying for child support has filed for bankruptcy, you may wonder the effects it might cause on your child support payments.
Note that the bankruptcy court cannot discharge child support in bankruptcy. It means the parent owing child support cannot escape the responsibility by declaring bankruptcy. If your co-parent has ceased to pay child support, the court may use alternative methods to ensure he/she continues with the child support duty. The child support process is a complicated exercise, and you will require the help of a lawyer conversant with bankruptcy laws.
However, if the paying parent's financial stand has changed, the parent may call for a motion to change the order if he/she is encountering problems when making the payments. Therefore even when the presiding judge grants the motion and the payments are lowered, you will still have the duty for paying the child support.
Can You Stop Your Spouse From Declaring Bankruptcy?
According to the bankruptcy laws, you are not required to stop your partner from declaring bankruptcy. Under federal laws, your spouse has the right for filing bankruptcy. However, the law prohibits you from filing for bankruptcy as a method of revenge on your partner. In case you are on a mortgage, the law will allow the person who stays for a long time with the children to live in the house until the house is sold. Additionally, if you have a joint mortgage and you don't have a child, the law allows both spouses to live in the house.
However, if your ex-spouse files a chapter 13 bankruptcy, the law requires you to continue making payments as you did before. Note that if you never made mortgage payments before filing for chapter 13, you should not begin making the contributions.
What is the Wife's Attorney Fee?
In several cases, divorce is seen as a war of attrition between the married couples. Sometimes the family court orders the husband to make payments for the wife's attorney fee. As the husband, you may end up paying a huge fee. Will you wipe your wife's attorney fee by declaring bankruptcy? In most cases, the ex-husband will file for bankruptcy after they finalize the divorce exercise. The ex-husband tends to file the wife's attorney fee as a debt in their listings. The California courts see the wife's attorney fee among the non-dischargeable debts. Therefore the ex-husband won't discharge the wife's attorney fee.
Seek Legal Representation
You may have hired a divorce attorney together with your ex-spouse. However, if you and your partner are filing for bankruptcy, you will have to seek an alternative lawyer. The law prohibits attorneys from representing the same clients when they have conflicting interests. If one spouse declares bankruptcy, a conflict of interests is created since the spouses are opposing each other. Note that by finding an alternative bankruptcy attorney, the spouses will pay their legal fee separately. Moreover, it may be time-consuming to find a separate attorney.
You need to understand how bankruptcy and family laws intertwine. Ensure you contact an attorney early enough to evaluate your situation and provide guidance on the whole process. Sometimes you may feel overwhelmed when handling both family and bankruptcy laws. Spousal support, child support, divorce, and other family issues are difficult to deal with. The situation may worsen when bankruptcy is involved. However, hiring a competent bankruptcy attorney will ease the process. The attorney will provide legal help until you deal with family and bankruptcy cases.
Find A Los Angeles Bankruptcy Attorney Near Me
Do you want to file for bankruptcy and at the same time experiencing family issues? Bankruptcy cases tend to be complicated, overwhelming, and time-consuming. Therefore you will require the counsel of an attorney conversant with both family and bankruptcy laws. At Los Angeles Bankruptcy Attorney, we will help you fight for your rights. We have helped countless clients seeking legal help in Los Angeles, CA. Call us today at 424-285-5525and talk with our competent attorneys.