For many couples facing a potential divorce, dealing with marital debt and property settlement arrangements can be overwhelming. Financial issues frequently cause divorce. Rather than assigning liability to your various marital debts, it may be simpler to file a joint petition for bankruptcy relief. Debt that could be fought over in the divorce proceedings could simply be discharged through bankruptcy. It is important to note that you can file a joint petition with your spouse even if you are separated and living apart. If you already have a divorce decree, you cannot file jointly with your spouse. For this reason, many couples find that bankruptcy planning in conjunction with a divorce is prudent to minimize debts that need to be addressed in the divorce. Additionally, child support and maintenance are not dischargeable in bankruptcy proceedings. Other debts like very recent taxes and student loans are also not generally dischargeable in bankruptcy. It is also important to note that you do not have to file a joint petition with your spouse, you can file separately. Sometimes this is preferred, especially if your spouse concealed assets or liabilities or engaged in fraudulent conduct with creditors.
While there is an automatic stay afforded to you upon filing for bankruptcy relief which gives you a “breathing spell” from creditors, bankruptcy will not stay custody or other family court proceedings. The bankruptcy will however stay property settlement proceedings. If you have divorce and bankruptcy planning questions, you should consult both a divorce attorney and a bankruptcy attorney to fully understand both procedures.
About DelCotto Law Group
DelCotto Law Group is Kentucky’s asset protection law firm known for its commitment to the lifetime success of its clients. With offices located in Lexington, Louisville and Danville, DLG serves Kentuckians with complicated financial matters, especially in the areas of bankruptcy, complex litigation, and estate planning. For more information about filing bankruptcy or DelCotto Law Group, please call (859) 231-5800 or email [email protected].