When you, or anyone else in the Morris County area, file for divorce you might be faced with many other dilemmas at the same time, such as foreclosure and/or bankruptcy. Although some of these concerns might not seem connected to divorce, many of them can have a great affect on how your divorce settlement turns out. So what should you do if you are considering both divorce and bankruptcy at the same time?
According to BankRate.com, getting as many financial issues as possible resolved before you file for divorce is always a good idea. That’s because any unresolved issues could impact your bankruptcy. So how should you proceed? If you have a mortgage and are still liable for it, or if you have any other debt that is unsecured, then you will want to be sure that you’re eligible for Chapter 7 bankruptcy before you actually file.
If indeed you are eligible for Chapter 7, then it makes sense to eliminate any mortgage liability and other dischargeable debt as soon as you can. After you file for bankruptcy, you are now ready to file for divorce because by filing for bankruptcy you have now removed any or at least most of your debt liability.
Because the bankruptcy eliminates your liability you do not have to agree to pay that debt as part of your divorce settlement. On the other hand, if you file for divorce first and you agree to be accountable for any shared accounts that have outstanding debt, such as a credit card, then your bankruptcy wouldn’t remove your responsibility to help pay on that shared debt.
There are of course many choices to make when you are considering both divorce and bankruptcy, but typically you will come out better in your divorce settlement if you file for bankruptcy first.
While you might find this information helpful, you should not consider it as legal advice.