Everyone experiences difficult times in their life. Loss of employment, major illness, and unexpected pregnancies are just a few of these. A leading reason why these events are so traumatic is because financial difficulties are usually accompanied with them. In many cases, financial complications are the leading cause of divorce, and likewise, divorce can be the leading cause of bankruptcy. So, it’s no surprise that we occasionally see these two situations happen at the same time. Though both actions are separate, the emotional nature of such decisions can create possible issues that cross paths and can result in a lengthy and painful process for both parties.
If you and your spouse have come to the decision that divorce and bankruptcy are the best options in moving forward with your lives, there are a couple of options that you must keep in mind. This article strives 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 number of factors to consider.
To answer this question, you should talk about your particular circumstances with a knowledgeable bankruptcy expert. You will need to discuss how you anticipate dissolving the marriage– will the divorce be contested or uncontested? Or will particular issues be contested that will require a lawsuit? Usually, divorces are a very complex process and there will be complications that develop without your prior consideration. This simply highlights the value of proper research and preparation.
If you’re confident that your soon to be ex-spouse will not agree on how you can distribute your assets and debts, and litigation is more than likely, the first step you should take is to look for a qualified divorce lawyer. The key to a successful outcome for both bankruptcy and divorce is having experienced legal support. Both your bankruptcy specialist and divorce lawyers will need to communicate regularly to make sure they have all relevant information to give you the best case possible. Although both events are separate, there are subjects that will emerge in both cases that can significantly affect the result of each outcome.
In some cases, filing for bankruptcy prior to filing for divorce is favourable. Both you and your spouse have the choice of filing a joint bankruptcy, in addition to individual bankruptcies. Normally, both you and your spouse will owe creditors together, in which case filing for joint bankruptcy may be an attractive option. If you have not filed for divorce at this point, then bankruptcy can considerably assist to eliminate joint debt, and aids in the division of property when the divorce is eventually filed. While bankruptcy does not divide joint assets and debts, it can usually remove substantial amounts of joint marital debt.
The most prevalent challenge here is that filing for joint bankruptcy indicates that you and your spouse will need to make joint decisions. If this is not possible, then joint bankruptcy will not be a solution. Along with that, once a divorce is filed, it’s highly likely that both parties will not come to an understanding matters relating to bankruptcy, further complicating the process. If your soon to be ex-spouse declines to file for bankruptcy, then the process changes even further. Always remember that a divorce does not have any effect on filing for bankruptcy, either jointly or individually, and this can be done any time prior to, during, or after a divorce.
While both bankruptcy and divorce are difficult and lengthy processes, they’re also an opportunity to move forward with your life and start afresh. Understanding the intricacies of both actions is the key to successful outcomes, so an experienced legal support team is very important. If you’re in a position where you and your spouse can agree and make joint decisions, then generally 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 more information, or to speak with someone about your individual circumstances, contact Bankruptcy Experts Tweed Coast on 1300 795 575 or visit Bankruptcy Tweedcoast