Financial issues and divorce often go hand in hand. So it’s not surprising that some couples decide they want to file for both bankruptcy and divorce around the same time. Filing simultaneously can create significant complications and delays. Whether you file for bankruptcy or divorce first, largely depends on your individual circumstances. If you and your spouse have made the decision that divorce is your best option, your finances could be affected, as divorce is commonly cited as the leading cause for bankruptcy filing.
If you and your soon-to-be ex-spouse are considering filing for both divorce and bankruptcy, there are several options for you. Before filing for either, here are some important facts you should know:
1. Don’t file for divorce and bankruptcy at the same time
Most of the time people choose to file for bankruptcy first before going through with a divorce. There are several logical reasons for this choice. Once bankruptcy is filed, for both chapter 7 and chapter 13, an “automatic stay” is put into place. The automatic stay halts creditors from contacting you and puts a freeze on your assets and property.
If you filed for bankruptcy and then turned around and filed for divorce, causing the two to overlap then the automatic stay would just cause unecessary delay in your divorce case. Since a large part of the entire divorce process is splitting up assets, the automatic stay would make it virtually impossible for the family court to access and divide the assets, since they are put into a hold. This will just drag out the divorce process and costs which neither party needs.
2. Which one you should file first depends on your situation
There are a few things to consider before determining whether or not to file bankruptcy or divorce first. If you and your spouse are on amicable terms, it may be best to first file bankruptcy. Reason you may want to file for bankruptcy first here in Georgia:
Filing bankruptcy first would allow you you both to share the costs of attorney and filing fees.
Since many times your debt is joing with your spouse, filing bankruptcy together can allow you wipe it out and both get a fresh start instead of fighting over who has to pay what bill after the divorce.
In Georgia, if you live together in your home with your spouse you can double the homestead exemption of $21,500 and protect $43,000 in equity in your residence.
NOTE: If you and your spouse choose to file for chapter 7 bankruptcy, your joint income might put you over the income threshold for filing (you don’t pass the means test). If your individual incomes are below the threshold, you may want to explore the options of filing for divorce before bankruptcy and then just using your income for your bankruptcy.
3. Chapter 7 bankruptcy is ideal for a quick divorce in Georgia
One of the benefits of chapter 7 bankruptcy is the timeline of the process. Chapter 7 eliminates all dischargeable debt typically within four to five months, allowing you to file your divorce sooner if you choose to file bankruptcy first. In comparison, chapter 13 bankruptcy sets up a three to five year payment plan instead of completely eliminating debt, and can possibly drag your divorce or separation out longer than necessary. In addition, your bankruptcy attorney may have to withdraw from your Chapter 13 case if you become adverse to your spouse during the 3-5 years you are in the case.
TOP GEORGIA BANKRUPTCY LAWYERS
Saedi Law Group are experienced Georgia bankruptcy lawyers who have been helping Georgians file for bankruptcy for over 19 years.
We have filed thousands of bankruptcy cases here in Georgia and are in court every day fighting for our client’s rights against creditors. If you are currently struggling with overwhelming debt, or feel your financial situation will be severely stressed in the coming weeks, now is the best time to start looking at all options available to you.
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Saedi Law Group offers a free, no obligation consultation with an experienced attorney (not a paralegal) who will review your specific situation and advise you about your options for moving forward. Our team is passionate about our work and we take it very seriously.
It is a privilege to help clients and their families in times like these. Bankruptcy was created for this purpose. Please contact us today at (404) 919-7296 or info@saedilawgroup.com to learn about what you can do to protect your future. #Georgia #bankruptcy #attorneys #chapter13 #chapter7 #financialhelp #Atlanta #Rome #Newnan #Gainesville
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