Everyone goes through difficult times in their life. Losing a job, severe illness, and unexpected pregnancies are just a couple of these. A leading reason why these incidents are so traumatic is because financial troubles are normally accompanied with them. In most cases, financial problems are the leading cause of divorce, and on the other hand, divorce can be the leading cause of bankruptcy. So, it’s no surprise that we often see these two situations happen concurrently. Although both actions are separate, the emotional features of such arrangements can create possible issues that cross paths and can bring about a drawn-out and painful process for both parties.
If you and your companion have decided that divorce and bankruptcy are the best options in moving on with your lives, there are several options that you must keep in mind. This article strives to shed some light into a common question experienced by many in this position– which comes first: bankruptcy or divorce? Sadly, there is no ‘one-size-fits-all’ approach to answer this question, as there are a number of issues to think about.
To answer this question, you should take a look at your particular circumstances with a knowledgeable bankruptcy expert. You will need to discuss how you intend on dissolving the marriage– will the divorce be contested or uncontested? Or will several issues be contested that will require a lawsuit? Normally, divorces are a very complex process and there will be issues that arise without your prior consideration. This merely accentuates the value of sufficient research and planning.
If you’re confident that your soon to be ex-spouse will not agree on ways to distribute your assets and debts, and litigation is more than likely, the first step you should take is to look for a competent divorce lawyer. The key to a prosperous result for both bankruptcy and divorce is having experienced legal support. Both your bankruptcy expert and divorce lawyers will have to talk frequently to make sure that they have all relevant information to give you the best case possible. Whilst both events are separate, there are issues that will develop in both cases that can substantially affect the result of each outcome.
In some cases, filing for bankruptcy prior to filing for divorce is beneficial. Both you and your spouse have the option of filing a joint bankruptcy, in addition to individual bankruptcies. Normally, both you and your spouse will owe creditors collectively, in which case filing for joint bankruptcy may be an attractive option. If you have not filed for divorce at this point, then bankruptcy can significantly assist to eliminate joint debt, and aids in the distribution of property when the divorce is eventually filed. While bankruptcy does not separate joint assets and debts, it can often remove considerable amounts of joint marital debt.
The most prevalent challenge here is that filing for joint bankruptcy means that you and your spouse have to make joint decisions. If this is not possible, then joint bankruptcy will not be an option. Furthermore, once a divorce is filed, it’s very likely that both parties will not agree 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 bear in mind that a divorce does not have any effect on filing for bankruptcy, either jointly or individually, and this can be done at any time prior to, during, or after a divorce.
While both bankruptcy and divorce are stressful and time-consuming processes, they’re also an opportunity to move forward with your life and start afresh. Understanding the complexities of both actions is the key to successful outcomes, so an experienced legal support team is very important. If you’re in a position where you and your spouse can agree and make joint decisions, then commonly 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 more information, or to speak with someone about your individual circumstances, contact Bankruptcy Experts Port Stephens on 1300 795 575 or visit http://www.bankruptcyexpertsportstephens.com.au