Divorce is a highly emotional issue that can take a toll on an entire family just like financial difficulties can. But when both are occurring, individuals may feel at a loss as to how to proceed. When divorce is an issue and bankruptcy is looming, it is important to consult with a bankruptcy attorney like Richard Schwartz. With the help of a bankruptcy attorney, you will have a better idea of your rights and the options that will help you get to a better future.
Which Comes First: Divorce Or Bankruptcy?
Some strategic consideration must be given to the timing of filing for bankruptcy. In some situations, it may be more beneficial to deal with the debts first and then file for divorce. In other cases, it may be more helpful to deal with bankruptcy first.
It is also important to understand that if you are divorced and file for bankruptcy, some of the agreements made during the course of your divorce may be impacted. Most financial obligations arising from a divorce are also not dischargeable, such as child support and spousal support (alimony).
Because of our more than 30 years of experience handling bankruptcy cases, we know how to guide families through the difficult challenges ahead, including traditional and non-traditional households.
If debts are eliminated through a bankruptcy filing prior to finalizing the divorce, there will be one less issue the parties need to address in the divorce.
A hold-harmless agreement is an agreement that is made between the parties during the divorce process. This agreement details who will pay which creditors and which party is responsible for certain debts. The other spouse is "held harmless" in the debts that he or she is not contracted to be responsible for.
Be warned: Creditors are not bound by hold-harmless agreements.
Creditors can still go after one party or both parties to recover the money they are owed despite the presence of a hold-harmless agreement. It is important to know this, as filing for bankruptcy before entering into any agreements may help both parties prevent excessive harassment from creditors.
Contact Our Firm For Advice
At Kruger & Schwartz, we understand the unique and difficult challenge of trying to handle divorce and the possibility of filing for bankruptcy. With our help, you will be well-informed about your debt-relief options and we will act as guides for you during the two worst times in any person's life.
To schedule your free initial consultation, call either our Kentucky office or our Indiana location at 502-485-9200 or 812-945-9200. Either office may also be reached by calling 866-366-3328 (toll free) or by sending an email.