Considering Divorce and Bankruptcy? Consider Both Together.
Money problems are a leading cause of divorce. In many cases, at least one party is contemplating filing bankruptcy at the same time the couple is considering divorce.
Keep in mind that in Utah, both spouses are equally responsible for debts incurred during a marriage. A divorce settlement will divide the debts between the two parties, but creditors can still attempt to collect from either spouse. If your spouse doesn’t stay timely with his or her debt payments, creditors will come to you to make up the difference.
If you and it will focus 100% of its collection effort on you.
In order for both of you to be free of the debt, you must both declare bankruptcy. If you do so, your debt burden will decrease, but your credit will suffer. If you decide instead to pursue legal action against your spouse, your credit will remain intact, but you will both have to make good on the debt. Either option will incur its own legal fees.
For this reason, divorcing couples who anticipate either or both parties struggling to stay current with debts are well-advised to weigh all their divorce and bankruptcy actions at the same time. It may be prudent to declare bankruptcy jointly before divorce.
Filing fees for individual and will make a difference regarding whether you choose Chapter 7 or Chapter13 relief.
A Chapter 7 bankruptcy is a liquidation to discharge your unsecured debts. A Chapter 7 case can usually be completed within a few months and is still a viable option even if you are definitely planning to divorce.
A Chapter 13 bankruptcy, on the other hand involvement with the financial life of an ex-spouse.
However, in order to file for Chapter 7 bankruptcy relief, your household income must fall below certain limits. The limit for a joint bankruptcy is not twice that of individual bankruptcy – it is usually only a bit higher. Therefore, if both you andards.
If you are considering divorce and while all your options are still open.