A divorce is not only emotionally stressful, but it can also put an enormous strain on your finances. Filing for bankruptcy before a divorce may allow you to start over with a clean slate, but it can affect the process of dissolving your marriage. In most cases, hiring a bankruptcy lawyer before proceeding with the divorce helps avoid unnecessary delays and potential complications.

How Bankruptcy Affects Your Divorce

Why You Shouldn’t File for Divorce & Bankruptcy Simultaneously

It’s always best to avoid handling two legal matters at the same time, but this is especially true of bankruptcy and divorce. Filing for bankruptcy triggers an automatic stay, which puts an immediate halt to any collection efforts and asset transfers. While the bankruptcy court is reviewing your assets and debts, the family court will be unable to divide your marital estate, putting the entire divorce on hold.

Chapter 7 or Chapter 13

A Chapter 7 bankruptcy completely discharges unsecured debts. In exchange, the trustee may seize some of your assets to pay back creditors. For most borrowers, this process can be completed in a few months. Chapter 13 bankruptcy, on the other hand, is designed to help borrowers make up past due payments on secured debts over three to five years. This makes Chapter 7 the preferred option for divorcing couples who don’t want to share financial obligations after the marriage ends.

Doubling Exemptions

Every state allows bankruptcy petitioners to exempt a certain amount of personal property from seizure, including cash reserves, tools, clothing, and some home equity. In Ohio and many other states, married couples can double their exemptions, leaving you both with more assets to divide in the divorce. If you wait until after the divorce, your bankruptcy lawyer may not be able to keep your share of the marital assets from being seized.

If you’re struggling with debts you can’t repay, the bankruptcy lawyers at the Swartz Law Office LLC can help solve your legal and financial issues. They offer earnest, competent counsel to borrowers throughout Clermont County, providing personal attention and detailed guidance when you need it the most. Visit their website for an overview of their legal services, follow their Twitter for more tips and advice, or call (513) 732-0900 today to schedule your no-cost initial consultation with an experienced bankruptcy lawyer.