Tuesday, 17 January 2017

Should We Get Divorced Before Or After We File For Bankruptcy?

First let me remind you readers that each case is different. Although I try to set forth good information here, you really should call us for a free consultation because each situation is different.

As you probably know by now if you’ve been reading our blog, divorce is financially devastating. Even if you “get along” in your divorce.

bankruptcy and divorce in utah

I usually hear from potential clients about 2 years after their divorce is finalized to file for bankruptcy.

I always say the same thing, “You should’ve done this bankruptcy as part of your divorce.”

The reason why is simple: you only pay for bankruptcy once instead of twice.

Once the divorce is finalized, you have to file 2 bankruptcies instead of one!

That being said, if you are planning on getting divorced and also need to file bankruptcy, you probably want to file a chapter 7 (if you qualify) together BEFORE your divorce is finalized.

You can both file for bankruptcy while you are in the middle of your divorce case.

I understand that doesn’t always happen.

I understand you might not be able to stand your spouse and that’s why you’re getting divorced. So sometimes this doesn’t work.

Let’s discuss the 2 main types of bankruptcies that we do for clients while they are in divorce.

Chapter 7 Bankruptcy:

Low Income– If your joint income is low enough to qualify for a chapter 7 together, then file it before your divorce is finalized. Your joint bankruptcy will only result in paying attorney’s fees once and paying the court filing fee once.

High income– If your joint income disqualifies you for a joint chapter 7, then wait until you are divorced, or at least physically separated and on the road to divorce. If your separate incomes are each low enough to qualify for separate chapter 7 bankrutpcies, then file individual or separate cases. You’re paying twice the attorney’s fees and twice the filing fees, but it’s still cheaper than a chapter 13.

Chapter 13 Bankruptcy:

If you file a joint chapter 13 and then file for divorce; then, odds are pretty good that your attorney will have to withdraw as counsel, and then you will have to either file 2 new chapter 13 cases or bifurcate your case and each pay separate chapter 13 plans.

Your attorney will probably have to withdraw because you have created a nearly impermissible conflict of interest for him, and he can not represent both of you fairly.

Sometimes, your attorney may still be able to represent both of you in the bankruptcy case, but it’s really fact specific. You should call us to discuss your specific circumstances so we can decide what is the best course of action for you.

Our office has filed hundreds and hundreds of bankruptcies over the years and hundreds of divorce cases – so we know about these areas of law really well.

You want to make sure that your attorney knows what they are doing and have gone through both types of cases before, or you could be ill-advised.

Hope that helps.

Divorce in Utah

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 876-5875

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source http://lawyerdivorceutah.com/2017/01/17/should-we-get-divorced-before-or-after-we-file-for-bankruptcy/

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