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When Do Both Bankruptcy and Divorce Become Necessary?

When Do Both Bankruptcy and Divorce Become Necessary?
"""DIVORCE AND BANKRUPTCY

Divorce and bankruptcy are so closely related that they could be kin. Frequently, one succeeds the other. Financial issues frequently play a significant role in the demise of a relationship. No one desires to declare bankruptcy. People wait to see if financial problems resolve themselves. Frequently, they delay too long, and the relationship suffers as a result. And if the financial situation was poor before the divorce, it worsens once the parties have to pay for two households instead of one.

HOW TO ACT?

If you are married and considering divorce, you should obtain bankruptcy information BEFORE the divorce is final. If you and your spouse can get along well enough to file a Chapter 7 bankruptcy before your divorce is final, you can likely avoid the additional attorney fees and filing fees you would incur if you filed bankruptcy separately. That is a substantial amount of money.

The filing of a Chapter 7 bankruptcy jointly, even during a divorce, can be exceptionally advantageous: it can make the divorce much simpler. How about eliminating billable hours spent determining who should pay which debts? Simply place them all in Chapter 7.

Insolvency under Chapter 13 is problematic for a divorcing couple. This is due to the fact that Chapter 13 necessitates cooperation for the duration of the plan, which is at least three years and can be as long as five years. Who desires a long-term commitment to a transaction with someone you're attempting to avoid? Chapter 13 is probably not a viable option for any divorcing couple.

When there is a compelling reason not to file for Chapter 7 bankruptcy, or sometimes for other reasons, a Chapter 13 bankruptcy is filed. Typically, this occurs when clients have sufficient income to support themselves and a small amount - perhaps a couple hundred dollars a month - left over. This surplus is paid to the Chapter 13 trustee, who then pays the required amount to the creditors.

Consult a bankruptcy attorney if you are contemplating divorce and have enough financial problems to contemplate chapter 7 bankruptcy. At least for the initial consultation, the majority of bankruptcy lawyers will provide complimentary consultations. Occasionally, the elimination of financial tension can provide a couple with sufficient relief to determine whether other seemingly insurmountable issues in the relationship can be resolved after all. ""Best of luck out there!""

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"When Do Both Bankruptcy and Divorce Become Necessary?" was written by Mary under the Finance / Wealth category. It has been read 172 times and generated 0 comments. The article was created on and updated on 02 June 2023.
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