Divorce and Bankruptcy: Three Things to Consider

Going through any major life event or experience can be stressful, and a consumer bankruptcy or divorce on its own can be a time-consuming process. Yet many people are considering both personal bankruptcy and divorce at the same time for a variety of reasons. It is essential to take into account a number of considerations if you are thinking about bankruptcy and divorce, and our experienced Oak Park bankruptcy attorneys have three important considerations for you. If you have additional questions or need assistance with a Chapter 7 bankruptcy or Chapter 13 bankruptcy, the Emerson Law Firm is here to assist you.

1. Type of Bankruptcy May Determine Whether You Should File for Bankruptcy First

The type of bankruptcy you are planning to file for ultimately may determine whether you should file for bankruptcy before you file for divorce or vice versa. Chapter 7 bankruptcy, which is a liquidation bankruptcy, is a relatively quick process—a few months, typically—after which point all eligible debts are discharged and the debtor can get a fresh start financially. However, Chapter 13 bankruptcy is a much longer process. Since this is a type of reorganization bankruptcy instead of a liquidation bankruptcy, the process involves making payments through a repayment plan over a period of three to five years.

If you are planning to file for Chapter 13 bankruptcy on your own and you are also considering divorce, you will likely want to get divorced before you file for bankruptcy. Chapter 7 bankruptcy, differently, may be completed before a divorce in many cases and can often simplify the divorce process. Either way, this is something you should discuss in detail with an experienced bankruptcy lawyer.

2. Your Spouse’s Bankruptcy Plan May Affect the Order of Divorce and Bankruptcy

Whether or not your spouse is also planning to file for bankruptcy—that is, if you are planning to file for bankruptcy jointly—will likely determine the order of bankruptcy and divorce. If you are planning on a joint bankruptcy and are thinking about Chapter 7 bankruptcy, you should certainly file for bankruptcy before your divorce. All eligible marital debt can be discharged, making the process of property division in your divorce much easier. With Chapter 13 bankruptcy, you should know that a joint filing likely will delay your divorce by years, so it is important to seek advice from a bankruptcy lawyer who can help.

3. You Will Need to Know if Debt is Separate or Marital Property

Is the debt you want to discharge likely to be classified as separate or marital property in Illinois? That classification can certainly impact the order in which you file for divorce and bankruptcy.

Contact Our Experienced Oak Park Bankruptcy Lawyers

If you are considering both bankruptcy and divorce, it is critical to seek advice from an experienced Oak Park bankruptcy attorney who can help you to determine the order in which you should file for bankruptcy as well as other factors and issues you will need to consider as you plan ahead. Do not hesitate to get in touch with our firm to learn more about how we can offer assistance to you. Contact the Emerson Law Firm today to learn more.



See Related Blog Posts:

Top Reasons for Hiring a Consumer Bankruptcy Lawyer

Will I Have to Give Up My Smartphone and Laptop if I File for Bankruptcy?

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