When faced with life altering decisions like bankruptcy and divorce, neither one is easy to make. Both will dramatically change your financial and personal lives and if you are planning to do both at the same time, it can be confusing. Overall, bankruptcy will need to be dealt with first before a divorce. The Kansas City divorce lawyer at Carey Law Firm can answer your questions and guide you through this difficult time.
Do Bankruptcy and Divorce Affect Each Other?
Bankruptcy takes precedence over your divorce in general. If you begin filings for a bankruptcy during a divorce, it can delay the distribution of marital assets and liabilities until the bankruptcy is completed. Bankruptcy handles debts tied to a person’s name or social security numbers affecting how debts are handles during your divorce. A bankruptcy court deals with your income differently depending on whether you are divorced, married or separated at the time the case was filed. The bottom line is both cannot be done at the same time, you have to finish your bankruptcy before a divorce can be finalized.
Facts About Bankruptcy & Divorce
Divorce courts have many areas to rule on such as custody, visitation, child support, and alimony and a bankruptcy filed at the same time would drastically slow these proceedings. Some things to remember if considering filing for bankruptcy and divorce at the same time are:
- Child support and alimony will still be owed. If past-due alimony or child support is owed as part of a divorce decree, these debts cannot be forgiven in a Chapter 7 or a Chapter 13 bankruptcy. The court will not even grant a Chapter 13 discharge to finalize the bankruptcy if past-due child support or alimony is still due.
- Joint marital debts may still have to be paid. If you have to pay certain debts as part of your divorce decree, you might think about filing for bankruptcy to wipe them out. Your creditors can’t come to you for payment if you file for bankruptcy after your divorce, but they can still look to your ex-spouse for payment of debts you signed for together.
- Bankruptcy will not eliminate certain divorce debts. A divorce decree might order one party to make payments to the other in exchange for property. They can’t be wiped out if you file for Chapter 7 bankruptcy but, if you file for Chapter 13, usually they can be added into a payment plan.
- Property distribution. If money is owed under a divorce settlement that is not domestic support, the court won’t discharge the debt in a Chapter 7 bankruptcy but that is not the case with a Chapter 13 bankruptcy. It does have the authority to discharge other debt related to a settlement.
An Experienced Kansas City Divorce Lawyer and Bankruptcy Attorney
Our goal is to protect our clients rights and best interest while helping them resolve a bankruptcy and divorce. Call Carey Law Firm in Kansas City or Lee’s Summit today to help assure you that the right decisions are being made at (816) 875-9557 or Contact Us online for assistance.