Unfortunately, in many cases, divorce and bankruptcy go hand in hand. If you’re going through a divorce but facing financial trouble, it’s important to consult with a bankruptcy lawyer before anything is finalized. The timing of your bankruptcy filing can have a significant effect on your debt buden. Here’s what you need to know about the process. 

Your Guide to Bankruptcy & Divorce

Should You File for Bankruptcy Before You File for Divorce?

Consulting with a bankruptcy attorney will determine if you and your former spouse qualify for a bankruptcy filing. From there, you can look at all of your available options before entering into divorce proceedings.

Often times, it’s best to file a joint Chapter 7 bankruptcy before getting divorced. Under this scenario, the filing date is what’s most important. You can file for bankruptcy when you are married but be divorced when you receive your discharge. This provides a fresh start for both parties in a fairly short amount of time. Acting together to get rid of the marital debt will allow you to truly move on with your new single life. If you get a divorce and then file for bankruptcy, the divorce decree will likely require you to pay 50% of your ex-spouse’s unsecured debt. 

What’s the Difference Between Chapter 7 & Chapter 13 Bankruptcy?

Chapter 7 bankruptcy is usually considered better for the filer than a Chapter 13 since it legally wipes out your debt.  There is very little return to creditors in a Chapter 7 situation. The process is very quick, in that you can go from filing to discharge in as little as 90 days.

A Chapter 13 bankruptcy is basically a forced repayment plan that can last either three or five years, and requires a trustee to oversee just about every aspect of your financial life. The benefit of Chapter 13 is that, in many cases, you can receive a substantial discount off of your overall debt obligation.

Are There Any Debts You’ll Still Have to Pay?

Even after a bankruptcy discharge, some debts are considered non-dischargeable.  Debts that must be repaid include alimony, child support, student loans, and government fines. 

No divorce is easy, especially if you’re facing financial trouble. If you find yourself in this situation, don’t face it alone — turn to the compassionate attorneys at Cecil & Cecil, PA in High Point, NC. With more than 65 years of combined experience, their team provides residents throughout Guilford County with a wide range of services, including bankruptcy advice, elder law, wills, and estates. To learn more about how their team can help you achieve a secure financial future, visit their website. To schedule a free consultation, call (336) 883-8383 today.