One of the reasons that couples file for a divorce is due to financial stress and debt. Similarly, one of the reasons you may file for bankruptcy is to get out of debt.
Filing for a divorce or filing for bankruptcy are decisions that should be taken seriously and both have consequences. However, if you are considering filing for bankruptcy, there are many reasons why you may want to file for bankruptcy before filing for your divorce.
#1. Filing a joint bankruptcy will save you money. While you are married, you and your spouse can file a joint bankruptcy case. This will save you money, because there will only be one court filing fee, one set of documents to produce and one meeting with creditors. It will also typically save you on attorney fees. Although an attorney may charge more to do a joint bankruptcy case versus a single bankruptcy case, an attorney will almost never charge double the fee of a single bankruptcy case for a joint bankruptcy case.
#2. You get double the exemption. In a bankruptcy, there are certain exemptions that allow you keep some property. By filing a joint bankruptcy case you get to double the amount of exemptions, therefore, effectively doubling the amount of property you can keep.
#3. Saves time. Typically, filing for bankruptcy before filing for a divorce will save you time in both the bankruptcy case and in your divorce case. The bankruptcy will help to eliminate the parties’ debt and resolve some of the same issues in the divorce. Furthermore, if you file for a divorce first, and then, in the middle of the divorce, the other spouse files for bankruptcy, that will cause the divorce to have a delay in its proceeding.
#4: Helps in the Divorce. In a divorce, the assets and the debt must be allocated and taken care of. By first filing for bankruptcy, you will eliminate most, if not all, of your credit card debt, personal loans and other unsecured debt. This will help resolve those issues in the divorce.
#5. A bankruptcy may even prevent the divorce. One of the leading causes of divorce, is financial stress and financial debt. Although, a bankruptcy is difficult, it may reduce the amount of stress on your marriage.
#6. No joint debt. By filing a joint bankruptcy case, you may be able to eliminate your joint debt. Conversely, if a divorce is filed before your file for bankruptcy, then you and your spouse will need to split up this joint debt. This can be time consuming and lead to more legal fees in the divorce.
#7. Not filing for joint bankruptcy – you may stuck with most of the debt. The rules for debt in a bankruptcy case and in a divorce case are vastly different. If your spouse files for bankruptcy before the divorce, your spouse may leave you stuck with paying all of your debt.
If you are thinking of getting a divorce or need advice about your divorce, please contact David Badanes and the Badanes Law Office at 631-239-1702 or email at email@example.com.The Badanes Law Office has offices in Northport, Garden City, Brooklyn and Manhattan.
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