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Important points about divorce and bankruptcy

Many divorces stem from financial matters that just can't be resolved. When you are faced with mounting bills and tension that is leading to divorce, you might decide that you need to file for bankruptcy, too. The key here is that you don't want to do both of these legal matters at the same time because they can cause mutual problems.

When you are facing the need to handle a divorce and bankruptcy, you will have to determine which one is your priority. Unfortunately, this means that you and your soon-to-be ex will have to determine how to proceed.

Why shouldn't you file divorce and bankruptcy at the same time?

When you file for bankruptcy, the court issues an automatic stay. The benefit is that the creditors who have been harassing you can't do that any longer. The downside is that it puts your assets into a hold of sorts. This makes it almost impossible for the family law court to handle the division of property. Essentially, filing bankruptcy and for a divorce at the same time will delay the divorce until the bankruptcy is sorted out.

Which should I file first?

This is a decision that will take some thinking. If you file for bankruptcy first, you will have to remain married a little longer. On the plus side, you will only have to pay the fees and costs for bankruptcy with your current spouse. Once the bankruptcy is handled, you will be able to divide up property that remains.

If you simply can't stay married another second, you can file for divorce first. In this case, you will have to do the property division process before you can file for bankruptcy. Once you are divorced, you would handle the bankruptcy based on your property and debts only. The downside to this is that if your ex has a portion of marital debts, your credit report can suffer if he or she doesn't pay as required.

Another point to think about here is that you can't share an attorney with your ex if you file for a divorce and then file for bankruptcy during the divorce. If you file for divorce and allow that to finish before you get the bankruptcy started, sharing a lawyer for the divorce is possible. If you take care of the bankruptcy and then move forward with the divorce, you can share an attorney for each case if everything is amicable.

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Law Office of Ginger C. Cord, PSC
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Lexington, KY 40507

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