Bankruptcy for the Non-Filing Spouse
In most cases, if you’re married and in debt, you and your spouse file for bankruptcy jointly. However, in some cases, you and your spouse might file for Chapter 7 or Chapter 13 separately. Or, if you’re getting divorced, you will also opt to file separately – or your spouse might file.
In these cases, let our Daigle Law Office experts represent you, help you through the bankruptcy process, and determine how your assets are impacted.
What Happens When You File For Bankruptcy During a Divorce?
Filing for bankruptcy during a divorce can be a complex situation with significant consequences. There are many factors to consider, including:
Automatic Stay
- When you file for bankruptcy, an “automatic stay” goes into effect. This temporarily halts most collection efforts from creditors, including those related to marital debts. This can provide temporary relief from creditor harassment. However, the automatic stay typically applies to the filing spouse’s debts and assets, not necessarily to the other spouse.
Impact on Property Division
- Divorce settlements typically involve dividing marital property and debts. However, a bankruptcy filing can complicate this process. The bankruptcy court will take control of the assets in the estate (which may or may not include all marital assets). This can delay the finalization of the divorce settlement as the bankruptcy proceedings unfold.
Debt Discharge
- Not all debts are dischargeable in bankruptcy. In some cases, filing jointly might be an option to discharge some marital debts. However, there are strict requirements, and some debts, like child support or alimony, cannot be eliminated through bankruptcy.
Impact on Each Spouse
- The filing spouse’s exemption limits will determine which assets are protected from creditors. The non-filing spouse’s assets are generally not affected by the bankruptcy filing. However, suppose they were jointly liable for a debt the filing spouse discharges in bankruptcy. In that case, the creditor may still come after them for repayment.
Benefits of Hiring a Bankruptcy Attorney
When going through bankruptcy during a divorce – or if your spouse files for bankruptcy separately from you – it’s essential to hire a bankruptcy attorney. A Massachusetts bankruptcy attorney can advise you on the best course of action based on your specific financial situation and help you navigate the complexities of filing for bankruptcy during a divorce.
Bankruptcy attorneys offer numerous advantages, including:
- Advise You on Joint vs. Individual Filing: Our attorneys can analyze your financial situation and advise whether filing jointly with your spouse or individually makes more economic sense. They can navigate the complexities of joint filings and ensure both spouses understand the implications.
- Protect Your Assets: Our firm will help you understand bankruptcy exemptions and strategically plan to protect your assets from liquidation. This is especially crucial during a divorce when marital assets are being divided.
- Negotiate with Creditors: Our firm can represent you in negotiations with creditors. They can leverage their experience to potentially negotiate lower settlements or repayment plans for debts included in the bankruptcy filing.
- Handle Complexities: Bankruptcy during divorce creates numerous legal hurdles. A bankruptcy attorney can take the burden off your shoulders, handling all the legal paperwork, court appearances, and creditor communication.
- Provide Support: Filing for bankruptcy and going through a divorce can be emotionally draining. An experienced attorney can provide guidance and support throughout the process, helping you navigate this challenging period.
Why Hire Us to Handle Your Bankruptcy During a Divorce?
Whether you are in the process of a divorce, remarried, and have bills separately, or for other reasons, Daigle Law Office will provide you with the utmost competent and experienced support and help protect your rights.
To schedule a free consultation, please call Daigle Law Office today at 508-771-7444.
