Everyone goes through challenging times in their life. Job loss, major illness, and unplanned pregnancies are just a handful of these. A leading reason why these situations are so traumatic is because financial troubles are normally accompanied with them. In most cases, financial troubles are the leading cause of divorce, and conversely, divorce can be the leading cause of bankruptcy. So, it’s not a surprise that we often see these two situations happen concurrently. Although both actions are separate, the emotional features of such decisions can create potential issues that cross paths and can trigger a drawn-out and distressing process for both parties.
If you and your partner have made up your mind that divorce and bankruptcy are the best options in moving forward with your lives, there are a few options that you must consider. This article aims to shed some light into a common question experienced by many in this position– which comes first: bankruptcy or divorce? Unfortunately, there is no ‘one-size-fits-all’ approach to answer this question, as there are a few issues to consider.
To answer this question, you should go over your individual circumstances with a qualified bankruptcy expert. You will need to discuss how you anticipate dissolving the marriage– will the divorce be contested or uncontested? Or will particular issues be contested that will require litigation? Typically, divorces are a very demanding process and there will be matters that appear without your prior consideration. This simply highlights the importance of effective research and planning.
If you’re confident that your soon to be ex-spouse will not see eye to eye on the best ways to share your assets and debts, and litigation is more than likely, the first step you should take is to find a competent divorce lawyer. The key to a successful outcome for both bankruptcy and divorce is having knowledgeable legal support. Both your bankruptcy expert and divorce lawyers will need to communicate frequently to make sure they have all relevant information to give you the best case possible. Though both events are separate, there are topics that will arise in both cases that can significantly 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 choice of filing a joint bankruptcy, in addition to individual bankruptcies. Usually, both you and your spouse will owe creditors collectively, in which case filing for joint bankruptcy may be an appealing option. If you have not filed for divorce at this point, then bankruptcy can greatly help to eliminate joint debt, and aids in the distribution of property when the divorce is ultimately filed. While bankruptcy does not separate joint assets and debts, it can usually eliminate significant amounts of joint marital debt.
The most frequent concern here is that filing for joint bankruptcy means that you and your spouse have to make joint decisions. If this is not conceivable, then joint bankruptcy will not be a solution. Along with that, once a divorce is filed, it’s very likely that both parties will not come to an understanding issues relating to bankruptcy, further complicating the process. If your soon to be ex-spouse declines 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 any time prior to, during, or following a divorce.
While both bankruptcy and divorce are stressful and lengthy processes, they’re also an opportunity to move forward with your life and start over again. Understanding the intricacies of both actions is the key to successful outcomes, so an experienced legal support team is extremely important. If you’re in a position where you and your spouse can agree and make joint decisions, then usually both actions will be less costly and time consuming. What is clear is that you should spend the time and money on knowledgeable law firms relating to both your divorce and bankruptcy. For more information, or to speak to someone about your personal circumstances, contact Bankruptcy Experts Newcastle on 1300 795 575 or visit http://www.bankruptcyexpertsnewcastle.com.au