It will also help you eliminate some of your accumulated debts and pave the way for a fresh start for both of you. If you file for bankruptcy, you will have a clearer idea of how to handle the remaining debts between you and your partner. If your ex-spouse files for bankruptcy in the future, you will be protected because you would have taken care of your debts well in advance of the divorce proceedings.
The operation of the procedure is relatively straightforward. When you or your ex-spouse declares bankruptcy, all jointly owned property will become part of the estate and will be used to pay off any and all debts. This will also indicate that you have been granted an automatic stay, which prevents creditors from harassing you for money owed.
Keep in mind, however, that this postponement will not necessarily prevent you from receiving child support from your ex-spouse. The court will then determine which shared property is exempt from the bankruptcy, indicating it cannot be sold to pay off debts. The property will be divided between you and your ex-spouse by the divorce court.
When attempting to negotiate property settlements during a bankruptcy, you will be confronted with extremely complex issues. Some debts related to a property settlement may not be discharged during the bankruptcy process, so you will need to resolve those separately. However, if you can demonstrate that you are unable to pay your debts while endeavoring to fulfill your obligations to yourself and/or your children, those debts can be forgiven.
Or that by eradicating the debt, you will be better off in the long run due to the damage that would be caused to those you owe if you did not pay them. If you believe that your ex-spouse may file for bankruptcy after the divorce is finalized, ensure that your finances are in order so that you are not caught off guard by any outstanding obligations now or in the future.
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