Things to consider about Bankruptcy and Divorce

Published August 17, 2021 | By Robert S. Simonian

Should you file before or after divorce?

This is a question many divorcing couples ask and the answer depends upon what joint assets and debts you have and what assets you intend to keep after the divorce. For most couples, this question is answered by whether or not you own a home, have equity in it, and one of you intends to keep it and who is residing in the home. In most cases, it is advisable to file bankruptcy jointly before the divorce. You should always consult with an experienced bankruptcy attorney when you first consider divorcing. Most often it is better to jointly resolve your debt issues before the divorce as it is one major component of divorce that can be quickly resolved and leave one less issue to argue over. There are things to consider about bankruptcy and divorce.

It is always best if both spouses can work together before the divorce is filed. It is important to rationally discuss the financial issues and come to a joint decision when possible. When communication breaks down and the parties cannot discuss matters together it often hurts both parties. An experienced bankruptcy lawyer should be able to discuss this with both spouses and make a recommendation that is in both parties interests.

Bankruptcy, child support and alimony.

Generally speaking, as a matter of public policy, both child support and alimony are not dischargeable in bankruptcy. However, by filing Chapter 13, a spouse obligated to pay support can pay the past due support in their chapter 13 bankruptcy plan and pay them over three or five years. Also, having the other debts discharged in bankruptcy and having one lower monthly payment can often make support payments more manageable.

Should you file bankruptcy jointly or individually?

The answer to this question depends mostly upon the nature of your relationship. For most divorcing couples, it is best to file jointly if at all possible; however, not every couple going through a divorce has the ability to work together on a joint filing.

Filing bankruptcy jointly means doubling your bankruptcy exemptions, increasing the amount of property and assets that can be protected in bankruptcy and from your creditors. If you own a home and one of you intends to retain it after the divorce, you can apply for the homestead exemption and protect the equity from your creditors.

If one of you files bankruptcy prior to divorcing and the other does not, the non-filer will be responsible for all joint debt that is discharged as far as their creditors are concerned. This often causes a problem for the spouse who did not file for bankruptcy and can become an issue in the divorce. The spouse who did not file will be responsible for the formerly joint debt.

Again, there are some instances where filing bankruptcy individually can be beneficial and you should always consult with an experienced bankruptcy attorney in the early stages of the divorce. Your divorce attorneys should work together with your bankruptcy attorney to achieve the best result.

The division of assets in a divorce and the effects on bankruptcy.

If you file bankruptcy after your divorce, the division of assets in your divorce property settlement agreement will control what assets you must exempt from your bankruptcy estate. Assets that you are to receive in the future may or may not be exempt. All of your assets provided for in the property settlement agreement must be disclosed in your bankruptcy petition. Also alimony and child support will count as income for the person receiving it and will count as an expense for the person paying it.

BANKRUPTCY – UNDECIDED OR UNSURE WHAT TO DO?

Talk To Us About Your Options:

We always tell potential clients to talk to us first to see if bankruptcy is in their best interest. The consultation is always free. Talk with Attorney Robert Simonian or Attorney Anthony Bucacci in private and in total confidentiality to see if filing bankruptcy in Massachusetts is right for you.

We can almost always come up with a solution to your financial problem. We have filed over 10,000 cases in the past 26 years and there are very few scenarios that we have not seen. We are known for our hard work, diligence, creativity and problem solving abilities. Often we are the bankruptcy attorneys other attorneys come to with difficult cases. Call today to see what we can do for you and what options are available. Often people believe they are the only ones with financial problems and are embarrassed of their situation. This is simply not true and many famous people have had to file for bankruptcy to get a fresh start.

Why Call Bucacci & Simonian:

We are known as one of the best bankruptcy attorneys in Southeastern Massachusetts serving the Bristol County and Plymouth County areas. Please inquire with anyone as to our reputation. Reputation is everything and we are very proud of ours. We have received numerous awards from various agencies and courts including the Bankruptcy Court in Boston, Massachusetts.

Using our knowledge and skill we have had several clients complete their five year Chapter 13 bankruptcy plans where they own their home FREE & CLEAR OF MORTGAGES. We understand how important it is to save clients’ homes from foreclosure, keep their cars from being repossessed and stop creditors from suing them and attaching their wages or attempting to seize their assets. This can be stopped almost instantly and we make every effort to be very available to your clients and can accommodate emergency situations. One of our most famous cases involved saving a clients’s multi-family home. https://www.courtlistener.com/opinion/1863802/in-re-brizida/

What to Avoid:

Do not attempt to file for bankruptcy on your own. You can make your situation much, much worse. If the bankruptcy petition is not correct you could lose your home, your car or possessions or you could be asked to file a different kind of bankruptcy where you have to make monthly payments when it could have been avoided. If you are not properly represented a bankruptcy trustee may foreclose on your house, allow your car to be repossessed, seize a tax refund or other assets. You could file under the wrong chapter, apply the wrong exemptions, fail to file all of the necessary forms or not understand the significance of important forms.

Protect Yourself:

Call us today for a free and complete bankruptcy consultation. We can protect you from your creditors and protect your home, cars, jewelry and other assets. Creditors and collection lawyers have a job to do and it may seem that they are heartless and will take anything they can from you. They are represented and you should be too. Call us today. The Federal Bankruptcy Court indicated that seeking the advice of a qualified attorney is strongly recommended. https://www.uscourts.gov/services-forms/bankruptcy/filing-without-attorney