Everybody experiences strenuous times in their life. Loss of employment, major illness, and unexpected pregnancies are just a handful of these. A leading reason why these situations are so traumatic is because financial complications are typically accompanied with them. In many cases, financial challenges are the leading cause of divorce, and conversely, divorce can be the leading cause of bankruptcy. So, it’s no surprise that we often see these two events happen concurrently. While both actions are separate, the emotional nature of such arrangements can create possible issues that cross paths and can create a time-consuming and painful process for both parties.
If you and your partner have made a decision that divorce and bankruptcy are the best options in moving on with your lives, there are a variety of options that you must keep in mind. This article aims 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 variety of factors to consider.
To answer this question, you should look at your particular circumstances with a competent bankruptcy expert. You’ll need to discuss how you intend on dissolving the marriage– will the divorce be contested or uncontested? Or will several issues be contested that will require lawsuits? Typically, divorces are a very intricate process and there will be issues that emerge without your prior consideration. This merely accentuates the importance of sufficient research and preparation.
If you’re confident that your soon to be ex-spouse will not see eye to eye on the best ways to share your assets and debts, and litigation is more than likely, the first step you should take is to seek a capable divorce lawyer. The key to a successful result for both bankruptcy and divorce is having knowledgeable legal support. Both your bankruptcy professional and divorce lawyers will have to talk frequently to make sure that they have all relevant information to give you the best case possible. Though both events are separate, there are matters that will develop in both cases that can drastically affect the result of each outcome.
In some cases, filing for bankruptcy before filing for divorce is advantageous. Both you and your spouse have the option of filing a joint bankruptcy, in addition to individual bankruptcies. Commonly, both you and your spouse will owe creditors together, 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 greatly help to eliminate joint debt, and aids in the distribution of property when the divorce is ultimately filed. While bankruptcy does not split joint assets and debts, it can often remove substantial amounts of joint marital debt.
The most common complication here is that filing for joint bankruptcy implies that you and your spouse need to make joint decisions. If this is not practical, then joint bankruptcy will not be a solution. Additionally, once a divorce is filed, it’s highly likely that both parties will not come to an understanding issues relating to bankruptcy, further complicating the process. If your soon to be ex-spouse refuses 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 at any time prior to, during, or following a divorce.
While both bankruptcy and divorce are stressful and lengthy processes, they’re also an opportunity to move on with your life and start over again. Understanding the complexities 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 costly and time consuming. What is clear is that you should spend the time and money on competent law firms relating to both your divorce and bankruptcy. For additional information, or to talk with someone about your individual circumstances, contact Bankruptcy Experts Northern Rivers on 1300 795 575 or visit http://www.bankruptcyexpertsnorthernrivers.com.au