Everyone experiences strenuous times in their life. Job loss, severe illness, and unexpected pregnancies are just a few of these. A leading reason why these incidents are so traumatic is because financial complications are normally accompanied with them. In most cases, financial challenges are the leading cause of divorce, and on the other hand, divorce can be the leading cause of bankruptcy. So, it’s no surprise that we sometimes see these two situations happen concurrently. Even though both actions are separate, the emotional features of such arrangements can create potential issues that cross paths and can bring about a drawn-out and distressing process for both parties.
If you and your partner have come to the decision that divorce and bankruptcy are the best options in moving on with your lives, there are a number of 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 various factors to consider.
To answer this question, you should go over your particular circumstances with a knowledgeable bankruptcy expert. You’ll need to discuss how you anticipate dissolving the marriage– will the divorce be contested or uncontested? Or will specific issues be contested that will require litigation? Regularly, divorces are a very complicated process and there will be matters that appear without your prior consideration. This simply emphasises the value of sufficient research and preparation.
If you’re confident that your soon to be ex-spouse will not agree on how you can split your assets and debts, and litigation is more than likely, the first step you should take is to seek a skilled divorce lawyer. The key to a prosperous conclusion for both bankruptcy and divorce is having knowledgeable legal support. Both your bankruptcy professional and divorce lawyers will need to communicate frequently to make sure that they have all relevant information to give you the best case possible. While both events are separate, there are issues that will arise in both cases that can drastically affect the result of each outcome.
In some cases, filing for bankruptcy prior to filing for divorce is favourable. Both you and your spouse have the choice of filing a joint bankruptcy, along with individual bankruptcies. Commonly, both you and your spouse will owe creditors together, in which case filing for joint bankruptcy may be an enticing option. If you have not filed for divorce at this point, then bankruptcy can considerably assist to eliminate joint debt, and aids in the distribution of property when the divorce is eventually filed. While bankruptcy does not divide joint assets and debts, it can often remove sizable amounts of joint marital debt.
The most frequent complication here is that filing for joint bankruptcy signifies that you and your spouse need to make joint decisions. If this is not achievable, then joint bankruptcy will not be a possibility. Along with that, once a divorce is filed, it’s highly likely that both parties will not settle on matters relating to bankruptcy, further complicating the process. If your soon to be ex-spouse refuses 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 before, during, or following a divorce.
While both bankruptcy and divorce are difficult and lengthy processes, they’re also a chance to move forward with your life and start anew. Understanding the complexities of both actions is the key to successful outcomes, so an experienced legal support team is paramount. If you’re in a position where you and your spouse can agree and make joint decisions, then generally both actions will be less costly and time consuming. What is clear is that you should devote the time and money on experienced law firms relating to both your divorce and bankruptcy. For more information, or to speak with someone about your individual circumstances, contact Bankruptcy Experts Perth on 1300 795 575 or visit Bankruptcy Perth