People in Florida and the surrounding areas are often faced with financial problems.
Sometimes divorce occurs immediately before or after a person’s financial crisis. A person might want to look at the options of bankruptcy for debt relief even if he/she is going through a major family change.
The question of whether or not someone going through or anticipating a divorce should file for bankruptcy depends on the individual’s facts. An experienced bankruptcy attorney is recommended for anyone who is interested in this step.
A bankruptcy filing can only be used by a Floridian divorcing
However, Floridians need to be aware of certain issues when considering whether to file for bankruptcy at the time of divorce.
One, certain debts that are related to divorce can be subject to special rules which may make it more difficult to discharge. For example, child support obligations are generally not dischargeable in bankruptcy.
Remember that one person can only file for bankruptcy. Only debts that are in the person’s name will be discharged.
The creditor might try to hold the spouse responsible if there is a joint debt. This could lead to the matter being re-argued before a family court judge.
It is important to carefully consider whether you should file for bankruptcy after a divorce
However, filing for joint Chapter 7 and Chapter 13 bankruptcy with a spouse can have many benefits.
This will save you at least filing fees and other costs. This allows couples to pay off most of their debts, which would otherwise be split in a divorce. Couples who choose this route have a greater chance of claiming exempt property to pay their creditors.
A Florida resident might want to divorce first in order to satisfy the income requirements for filing a Chapter 7 bankruptcy. This will ensure that the spouse’s income is not included in the calculation.
Remember that joint bankruptcy requires cooperation between estranged spouses. This is especially true for Chapter 13 bankruptcy. The couple must cooperate for many years as they work to fulfill their court-approved payment plan.
This post was written by Trey Wright, a bankruptcy attorney Pensacola! Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, specializing in bankruptcy law, estate planning, and business litigation.
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