Divorce and Bankruptcy in Las Vegas
Financial troubles and arguments about money are common factors in why couples seek a divorce. Divorces are a common reason for bankruptcy filings. Couples may have been in financial trouble before the divorce, or a spouse may have sustained a financial hardship because of the terms of the divorce or transitioning to a single income household.
Regardless of the reason, consulting an experienced Las Vegas bankruptcy lawyer about your options for debt relief is in your best interest. If you cannot afford to pay your debts, a bankruptcy case might help. However, if you are going through a divorce now or you are contemplating a divorce action, it is best to talk with a bankruptcy lawyer and a divorce attorney before you take any further steps on either legal matter.
Filing for Divorce and Bankruptcy – Which Comes First?
Deciding whether to file for bankruptcy relief or file a divorce petition first can be a complicated matter. In most cases, you do not want two legal proceedings moving through the courts simultaneously. Both cases could affect each other in unintentional and harmful ways. Therefore, the best option is to work with your Las Vegas bankruptcy lawyer and your divorce attorney to time the bankruptcy filing to give you the best outcome in both cases.
Filing Bankruptcy Before Divorce
In some cases, it may be best to file the bankruptcy action before the divorce, especially if you are filing for Chapter 7 relief. The bankruptcy case can get rid of debts you cannot pay, which can make debt division easier. If you cannot afford to keep your home, surrendering the home and getting rid of the mortgage debt before the divorce can also make property division easier.
However, if your spouse is a co-debtor on any debts or co-owns the home or other property, you may need to consider the ramifications of your Chapter 7 filing on your spouse. If your spouse co-signed the debts, he or she is responsible for repaying those debts once you receive your Chapter 7 bankruptcy discharge. Your spouse nor the judge may look too favorably upon your decision to “dump” the debts on your spouse.
On the other hand, if your spouse cannot afford to repay the debts, filing a joint Chapter 7 bankruptcy case before the divorce may resolve a lot of problems. You can both get out from under debts you cannot pay and get rid of property that is worth less than you owe on the property.
Cleaning up the debt problems before the divorce can make the divorce action quicker, less stressful, and less costly. Furthermore, by filing a joint Chapter 7 petition, you save money on the bankruptcy fees and costs.
Filing Bankruptcy After a Divorce
In some cases, it may be best to file for bankruptcy relief after a divorce. For example, if you and your spouse do not meet the income qualifications for a joint Chapter 7 bankruptcy case, you may qualify after the divorce when you only have one income in the household.
Also, if you need to file a Chapter 13 bankruptcy case, you may want to wait until after the divorce. Most spouses who are separating do not want to be tied financially to their ex-spouse for five years through a Chapter 13 plan. Additionally, if you file a joint Chapter 13 plan, your plan payment could be higher because it is based on both incomes.
Consult With Our Las Vegas Bankruptcy Attorneys to Discuss Divorce and Bankruptcy
At Your Vegas Lawyers, LLC, our bankruptcy lawyers have extensive experience handling bankruptcy matters related to divorce actions. We can help you decide which chapter of bankruptcy is best for you and choose a filing date that works best for your situation. We work with your divorce lawyer to determine the best strategy for protecting your best interests in both legal matters.
Call our office today to schedule your free consultation with an experienced Las Vegas bankruptcy attorney.