Bankruptcy in Keller, TX is an emotionally draining process, and even more so when it’s combined with divorce. When spouses decide to divorce, their finances often take a hit, and divorce is a common cause of bankruptcy. Before filing for bankruptcy protection, spouses should know the following facts.
Don’t File for Bankruptcy and Divorce Simultaneously
For simplicity’s sake, divorce and bankruptcy shouldn’t overlap. Many people choose to go through bankruptcy before divorcing, and there are several good reasons to do so. Because most of the process of divorce is focused on the division of assets, an automatic stay would make it nearly impossible for a family court to assess and divide assets. Filing for bankruptcy and divorce at the same time can make the latter more emotionally stressful for everyone involved.
Chapter 7 Is Good for Quick Divorces
One of the biggest advantages of chapter 7 bankruptcy is its quick timeline. In chapter 7, all dischargeable debt is eliminated within six months, which allows a party to file for divorce sooner. By comparison, chapter 13 bankruptcy comes with a three- to five-year repayment plan, which can make a divorce take longer than necessary. Such cases are quite complex, and it’s best to consult a bankruptcy lawyer to determine the right course of action.
Not All Debts Are Listed in Bankruptcy
If a debtor chooses chapter 7 bankruptcy in Keller, TX, they should remember that not all debts are dischargeable. These debts include:
• Spousal support
• Child support
• Government-imposed fines
• Student loans
• Court penalties
• Attorneys’ fees for child support or custody cases
Along with non-dischargeable debts, certain other debts can be barred as well. Debtors must follow the Bankruptcy Code to have their discharges approved, and they can have a discharge denied for various reasons. The best way to find out what can be discharged is to meet with a knowledgeable bankruptcy lawyer.
Call Today
Divorce and bankruptcy give families a chance to start fresh. By knowing more about these processes, clients can make more informed decisions and achieve the outcomes they deserve. Visit us online for more details or call the Law Firm of David S. Kohm to schedule a consultation.
