Everybody passes through challenging times in their life. Job loss, serious illness, and unplanned pregnancies are just a couple of these. A leading reason why these events are so traumatic is because financial troubles are usually accompanied with them. In most cases, financial complications are the leading cause of divorce, and on the other hand, divorce can be the leading cause of bankruptcy. So, it’s not surprising that we often see these two incidents happen concurrently. Although both actions are separate, the emotional nature of such decisions can create potential issues that cross paths and can result in a time-consuming and distressing process for both parties.
If you and your spouse have made up your mind that divorce and bankruptcy are the best options in moving on with your lives, there are a couple of options that you must keep in mind. This article aims to shed some light into a common question experienced by many in this position– which comes first: bankruptcy or divorce? Unfortunately, there is no ‘one-size-fits-all’ approach to answer this question, as there are a few issues to think about.
To answer this question, you should take a look at your individual circumstances with a competent bankruptcy expert. You’ll 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 lawsuits? Normally, divorces are a very complex process and there will be complications that appear without your prior consideration. This simply emphasises the value of adequate research and preparation.
If you’re confident that your soon to be ex-spouse will not agree on the best ways to split your assets and debts, and litigation is more than likely, the first step you should take is to find 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 want to correspond regularly to ensure they have all relevant information to give you the best case possible. While both events are separate, there are matters that will arise in both cases that can considerably 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, as well as individual bankruptcies. Ordinarily, both you and your spouse will owe creditors together, in which case filing for joint bankruptcy may be an enticing option. If you have not filed for divorce at this point, then bankruptcy can dramatically assist to eliminate joint debt, and aids in the division of property when the divorce is ultimately filed. While bankruptcy does not separate joint assets and debts, it can often eliminate considerable amounts of joint marital debt.
The most frequent issue here is that filing for joint bankruptcy signifies that you and your spouse will need to make joint decisions. If this is not achievable, then joint bankruptcy will not be a solution. Additionally, once a divorce is filed, it’s highly likely that both parties will not settle on matters relating to bankruptcy, further complicating the process. If your soon to be ex-spouse refuses 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 any time prior to, during, or following 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 over again. Understanding the complexities of both actions is the key to successful outcomes, so an experienced legal support team is paramount. If you’re in a situation 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 additional information, or to talk with someone about your personal circumstances, contact Bankruptcy Experts Dandenong on 1300 795 575 or visit http://www.bankruptcyexpertsdandenong.com.au