If you are considering divorce or are already divorced, it may be a very stressful period. This is particularly valid if you or your ex are declaring bankruptcy. You might be unsure of how this will impact your assets or you. What impact does bankruptcy have on you then?
Divorce and Bankruptcy
Your bankruptcy lawyer can help you with crucial facts to add in your divorce agreement if you haven’t yet filed for divorce. Have you already begun the divorce process? You should still have a thorough discussion about your financial alternatives with your bankruptcy lawyer to resolve any obligations, such as credit card and medical expenses.
Although alimony and child support payments cannot be cancelled in bankruptcy, doing so will significantly lessen your financial burden if you can eliminate or reduce your other debts. The automatic stay will take effect after you file for bankruptcy. This injunction was issued by a judge. After filing for bankruptcy, it stops creditors from bringing legal action against you. Without the filing, creditors may call, text, email, or mail you. Consequently, if you are having trouble paying off your obligations, you could feel overwhelmed. Any property division in a divorce that is filed while a bankruptcy case is still continuing will be postponed since the automatic stay is in effect until the bankruptcy case is concluded.
What occurs to my debt and possessions?
Family law can occasionally divide community property, but the other ex-spouse will still be subject to creditor claims. This implies that if you are a co-signer or joint owner, you may still be held liable for the debt even if your ex-spouse declares bankruptcy. To address your present position, you should consult with an experienced bankruptcy lawyer. This will help you choose which solutions are best for your circumstances.
Unsure An unsecured debt is what? Credit card debt is an illustration of unsecured debt. Is your spouse obligated by law to repay your unsecured debt? In such case, the family court imposed a duty on the two of you.
This excludes the creditor who is a third party (credit card creditor). In other words, regardless of the family court’s responsibility, the creditor will be free to pursue you if your ex-spouse stops paying the debt. You must return to family court to seek redress if your family law court order was for support. Your ex-spouse may be forced to give you more support as a consequence, which their bankruptcy will not be able to discharge. If your ex filed for Chapter 13 and the family court order was for something different, such as an equalisation payment, you will need to file a proof of claim in the case.
What year did your ex-file? Knowing the date the bankruptcy was filed will give you adequate time to consult with your lawyer.
How was the Chapter Filed? You can have extra safeguards under the automatic stay depending on what chapter of bankruptcy was filed. As an illustration, if your ex filed a Chapter 7, you as the co-signer will be liable for paying back the loan (s). Your ex is fully liable for any debts in their name if they filed a Chapter 13 bankruptcy. To retrieve the money that was not paid from your ex’s court-mandated payment plan, the creditor could file a lawsuit against you.
As soon as you decide to file for bankruptcy or learn that your ex-spouse plans to do so, please make sure to consult with a bankruptcy lawyer to go through all of your duties and rights. If you need legal assistance or guidance before filing for bankruptcy, get in touch with the renowned Recovery Law Group. Visit https://recoverylawgroup.com/bankruptcy/ to set up a consultation.
Am I Safe in My Retirement?
Yes, the exclusions and automatic stay will safeguard your retirement. The particular sums should be discussed with your lawyer as they differ from state to state.
Are You Considering Selling Your Property?
The principal house is typically regarded as exempt and safeguarded during the bankruptcy. However, the property could be auctioned to settle some of the filing ex-obligations spouse’s if it is jointly owned as community property. You will receive the balance of what is owing to you. On the other hand, you will be in breach of the automatic stay if you attempt to sell a home or other piece of property that is still considered communal property. It is crucial to discuss your plans to sell a house that is regarded as common property with a lawyer.
Do You Need More Details?
It is essential to speak with a bankruptcy lawyer before deciding when to file your bankruptcy, if at all feasible. You can get crucial information from your lawyer about which solutions are best for you.