It’s often said that having problems with money is one of the main reasons married couples get divorced. If the two are in dire enough financial straits that filing for Chapter 7 bankruptcy would be advisable, they may wonder whether it’s better to get divorced first and file separately. Consulting a Chapter 7 Bankruptcy Attorney in Wetumpka AL is a way the couple can get their questions answered and decide how to proceed.
Dissolving and Dividing Debt
A Chapter 7 Bankruptcy Attorney in Wetumpka AL can explain the advantages of dissolving the couple’s debt before they split. If they do not take this step, the couple will have to figure out how to divide the debt between them and then approach their financial problems separately.
Declaring bankruptcy before divorcing allows each of them to make a brand new start in the realms of both relationships and finances. It also will cost them less in legal fees since they can hire a lawyer together. This is not acceptable for a divorced couple, as it would present a potential conflict of interest.
An Amicable Divorce?
A problem with this strategy is that the couple must be getting along well enough to be fair with one another in the proceedings. If either feels hostile, it can be difficult to work out a solution that both feel is appropriate. If they still have assets like a joint savings account, some of those will have to be dissolved to pay at least something to creditors. When one spouse has contributed substantially more to that account, there may be hard feelings about dissolving it to pay a spouse’s personal credit card debt.
Combined Income Issues
Another point that has to be considered is whether the couple’s combined income works against them. Their income might be too high to file for Chapter 7. People usually opt for Chapter 13 in that case, in which they pay creditors over several years in a structured program. A divorced couple usually does not want to be tied to each other financially for that long. Questions about all these issues can be answered at a law firm such as Courtney & Mann LLP.
