Everyone experiences difficult times in their life. Job loss, severe illness, and unplanned pregnancies are just a couple of these. A leading reason why these incidents are so traumatic is because financial problems are usually accompanied with them. In most cases, financial difficulties are the leading cause of divorce, and on the other hand, divorce can be the leading cause of bankruptcy. So, it’s no surprise that we often see these two events happen simultaneously. Even though both actions are separate, the emotional nature of such arrangements can create possible issues that cross paths and can trigger a lengthy and distressing process for both parties.
If you and your spouse have made a decision that divorce and bankruptcy are the best options in moving on with your lives, there are a number of options that you must keep in mind. This article strives to shed some light into a common question experienced by many in this position– which comes first: bankruptcy or divorce? Sadly, there is no ‘one-size-fits-all’ approach to answer this question, as there are a few issues to consider.
To answer this question, you should discuss your particular circumstances with a professional bankruptcy expert. You will need to discuss how you anticipate dissolving the marriage– will the divorce be contested or uncontested? Or will several issues be contested that will require litigation? Typically, divorces are a very demanding process and there will be issues that emerge without your prior consideration. This simply accentuates the value of adequate research and preparation.
If you’re confident that your soon to be ex-spouse will not agree on ways to share your assets and debts, and litigation is more than likely, the first step you should take is to find a qualified divorce lawyer. The key to a prosperous conclusion for both bankruptcy and divorce is having skillful legal support. Both your bankruptcy professional and divorce lawyers will want to converse regularly to ensure they have all relevant information to give you the best case possible. Even though both events are separate, there are subjects that will arise in both cases that can considerably affect the result of each outcome.
In some cases, filing for bankruptcy before filing for divorce is beneficial. Both you and your spouse have the option of filing a joint bankruptcy, in addition to individual bankruptcies. Generally, both you and your spouse will owe creditors collectively, in which case filing for joint bankruptcy may be an appealing option. If you have not filed for divorce at this point, then bankruptcy can dramatically assist to eliminate joint debt, and aids in the distribution of property when the divorce is subsequently filed. While bankruptcy does not divide joint assets and debts, it can often remove significant amounts of joint marital debt.
The most common challenge here is that filing for joint bankruptcy denotes that you and your spouse have to make joint decisions. If this is not conceivable, then joint bankruptcy will not be a solution. In addition, once a divorce is filed, it’s very likely that both parties will not settle on issues relating to bankruptcy, further complicating the process. If your soon to be ex-spouse declines to file for bankruptcy, then the process changes even further. Always bear in mind that a divorce does not have any effect on filing for bankruptcy, either jointly or individually, and this can be done any time prior to, during, or after a divorce.
While both bankruptcy and divorce are difficult and lengthy processes, they’re also an opportunity to move forward with your life and start over again. Understanding the intricacies of both actions is the key to successful outcomes, so an experienced legal support team is vital. If you’re in a position where you and your spouse can agree and make joint decisions, then commonly both actions will be less expensive and time consuming. What is clear is that you should spend the time and money on experienced law firms relating to both your divorce and bankruptcy. For additional information, or to talk to someone about your personal circumstances, contact Bankruptcy Advice on 1300 879 867 or visit https://www.bankruptcy-advice.com.au