Divorce can present some serious financial challenges--so serious, in fact, that an individual has to file bankruptcy as a result. Any bankruptcy attorney will tell you that, while these are two separate legal areas, there are some important considerations to bear in mind when pursuing bankruptcy at or around the same time as a marital split. Below are a few of these considerations in more detail, as well as the helpful role a bankruptcy attorney can play.

Most People File Bankruptcy First

Most people have an idea of the financial toll a divorce could take, so filing beforehand is often a smart move to make. A bankruptcy institutes an automatic stay on any creditor action or foreclosure currently in process against you. This stay essentially freezes your assets. Since a large component of divorce is the division of assets, neither you nor your spouse can transfer ownership or sell property while the stay is in place. It's typically best to wait until the bankruptcy has been completed and the discharge granted before pursuing divorce.

Filing Chapter 7 Bankruptcy Is a Faster Process

If divorce is on the horizon, you and your spouse may be anxious to get both the bankruptcy and divorce over as quickly and painlessly as possible. Chapter 7 bankruptcy would be the more logical path to choose since it requires far less time and commitment. A bankruptcy attorney can get an average Chapter 7 case dismissed within three to six months, meaning you could proceed with a divorce in just a few months' time.

Certain Debts Are Not Dischargeable in Bankruptcy

If you do opt for divorcing prior to bankruptcy, it's important to understand that certain divorce-related debts are not going to be eliminated in a Chapter 7 filing. Child and spousal support cannot be wiped out in bankruptcy, and you still have an obligation to honor these payments as directed. Your bankruptcy attorney will explain in more detail the other kinds of debt that cannot be eliminated, which also includes student loans and past-due taxes.

Bankruptcy attorney Sean O'Neill of the O'Neill Law Firm, LLC has 20 years of experience representing the people of La Crosse County, Wisconsin. He also offers services as a family lawyer and criminal defense attorney. Call (608) 519-3551 or visit his website to schedule a free initial consultation.