Everybody experiences difficult times in their life. Losing a job, severe illness, and unexpected pregnancies are just a handful of these. A leading reason why these incidents are so stressful is because financial difficulties are commonly accompanied with them. In many cases, financial complications are the leading cause of divorce, and on the contrary, divorce can be the leading cause of bankruptcy. So, it’s no surprise that we often see these two situations happen in unison. While both actions are separate, the emotional features of such decisions can create potential issues that cross paths and can create a drawn-out and painful process for both parties.
If you and your partner have concluded that divorce and bankruptcy are the best options in moving on with your lives, there are a variety of options that you must take into consideration. 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 couple of variables to think about.
To answer this question, you should review your individual circumstances with a qualified bankruptcy expert. You’ll need to discuss how you intend on dissolving the marriage– will the divorce be contested or uncontested? Or will some issues be contested that will require a lawsuit? Normally, divorces are a very challenging process and there will be issues that arise without your prior consideration. This merely emphasises the importance of sufficient research and preparation.
If you’re confident that your soon to be ex-spouse will not agree on how to divide 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 prosperous outcome for both bankruptcy and divorce is having skillful legal support. Both your bankruptcy expert and divorce lawyers will have to communicate frequently to ensure they have all relevant information to give you the best case possible. Whilst both events are separate, there are issues that will emerge in both cases that can substantially affect the result of each outcome.
Sometimes, filing for bankruptcy prior to filing for divorce is beneficial. Both you and your spouse have the option of filing a joint bankruptcy, as well as 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 significantly help to eliminate joint debt, and aids in the division of property when the divorce is ultimately filed. While bankruptcy does not split joint assets and debts, it can usually eliminate significant amounts of joint marital debt.
The most common issue here is that filing for joint bankruptcy denotes that you and your spouse will need to make joint decisions. If this is not achievable, then joint bankruptcy will not be a solution. In addition, once a divorce is filed, it’s very likely that both parties will not agree on 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 keep 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 after a divorce.
While both bankruptcy and divorce are difficult and lengthy processes, they’re also a chance to move forward with your life and start over again. Understanding the intricacies of both actions is the key to successful outcomes, so an experienced legal support team is paramount. If you’re in a position where you and your spouse can agree and make joint decisions, then generally both actions will be less expensive 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. To find out more, or to speak to someone about your personal circumstances, contact Bankruptcy Experts on 1300 795 575 or visit https://www.bankruptcyexpertsfrankston.com.au