Filing for divorce and filing for bankruptcy can be two very important decisions that you make and you may en d up being faced with these decisions around the same time. Both should be done with careful thought, and the representation of a professional. Since these can take time and effort, many people opt out of taking them both on and once, and may be left with the question of which to file for first. Depending on when you file there will be differences in your case but choosing how and when to file should be done under the guidance of a Long Island bankruptcy lawyer since every situation is different.
Couples that are still married can file jointly under bankruptcy but they will typically need to be able to work together to do so. If they are both able to see the benefit to themselves of filing jointly, then it may allow for greater cohesion. Debts that are from the time of the marriage will be considered marital debt, in spite of the name that is on them. For some people, the fact that this will likely be divided through equitable distribution is enough for them to seek bankruptcy before the divorce. That does not mean it is the right option for everyone and both sides can actually have their pros and cons. The divorce will deal with things such as debt, property and other assets, and whether or not the bankruptcy is filed for first will come in to play during these steps of the divorce.
In some cases a spouse may file for bankruptcy in the middle of the divorce. Since this can be a cause of conflict and may complicate an already difficult matter, the automatic stay may put aspects of the divorce on hold until the bankruptcy is resolved. If the bankruptcy is filed for after the divorce, then it will be done by just the individual. This will mean that only their assets which were divided up in the divorce will be taken into account. After a divorce is finalized, there may be certain obligations, including spousal support or child support that can cause an individual to fall into debt. These types of debt cannot be discharged under Chapter 7 or Chapter 13. Filing for divorce should be handled in a manner that will get you the best results, whether it is before or after a divorce, and this can be increased by working with a Long Island bankruptcy lawyer. You will need someone that is familiar with not only the state laws in New York, but the federal guidelines on bankruptcy as well. Contact our firm to get started!