Divorce and Bankruptcy
Bankruptcy Attorneys in Portland, OR
Divorce and bankruptcy are two concepts that are often intertwined-concepts that couples often deal with when on the brink of splitting up. In fact, 22% of the 50% of divorces are caused by financial issues. Plenty of individuals cite divorce as their main reason for filing for bankruptcy, both of which should be simultaneously planned in order to get the most cost-effective result. Several factors come into play in filing for bankruptcy before or after a divorce, which is why considering legal opinion is always a smart move in this case.
There are several ways to go about divorce and bankruptcy filings, from joint petitions to considering Chapter 7 vs. Chapter 13 bankruptcies. All these have varying rules that one must adhere to in order to achieve the most optimal result for both parties. This page also tackles property division which wipes out debts in an effort to simplify the division process along with several other income qualifications.
You might be tempted to take immediate action when torn between filing for bankruptcy or divorce, especially if it’s gotten to the point where you can’t pay off your debts. Take the smartest way out by consulting a Portland, OR divorce and bankruptcy attorney. The divorce and bankruptcy attorney will walk you through the entire process, explain the terms you find confusing, and offer to represent you in court.
Don’t wait out to drown in debt and heartbreak. Get in touch with a Portland bankruptcy law firm right now.
Can We File for Bankruptcy Together?
Yes, it is possible for couples to file a joint petition. A married couple’s bankruptcy starts when they file for an official bankruptcy paperwork to court. This joint petition the married couple files contains financial information of both individuals. If the married couple is divorcing, filing becomes more convenient since joint petitions come with benefits such as:
- The bankruptcy filed will wipe out both spouses debt
- The costs are a lot less compared to filing it apart.
There isn’t an obligation to file together, however. Spouses in need of bankruptcy protection can file individually or a drop in both individuals’ income might make each spouse file individually.
What are the Pros of Filing for Bankruptcy First?
Many couples choose to file for bankruptcy first, and rightfully so since there are plenty of benefits that come with choosing to file for bankruptcy such as:
- Costs-Filing costs are typically the same regardless if it’s joint or individual bankruptcy. However, if you feel that the both of you would need to file before the end of the marriage, do so as this practice can help you both cut costs.
- Attorney- Hiring one attorney is cheaper than hiring two, obviously. Take note to inform your attorney of your impending divorce to avoid any conflicting issues.
- Exemptions-Exemptions in bankruptcy allow you to protect certain assets from liquidation in order to pay off outstanding debt. Certain states allow the doubling of exemptions if the bankruptcy is filed jointly.
Are you still doubting whether to file for bankruptcy or divorce first? Well, know that the answer always depends on your personal and financial circumstances. Hire a Portland, OR divorce and bankruptcy attorney who can help guide you towards the best decision for your unique case.
Is It Beneficial To File for Divorce First?
Filing for divorce first isn’t exactly better or worse. As mentioned, it depends on your personal circumstances. Filing for divorce first has its perks, especially if you come from a higher income bracket. However, before filing for bankruptcy after your divorce, you have to consider if you and your spouse qualify for Chapter 7 bankruptcy. If your income is too high, you might qualify for individual bankruptcy or wait until the divorce to officially file for bankruptcy.
Are you in need of expert legal advice in the midst of this personal and financial crisis? Well, there’s always a light at the end of the tunnel. Enlist the help of a Portland, OR divorce and bankruptcy attorney to help you with your case.
What Is Property Division?
Bankruptcy can help obliterate your debts jointly, thus making the property division process smoother and easier. Prior to filing for joint bankruptcy, ensure that the state you live in allows exemptions that can help protect property that you and your spouse own. Some states allow couples to double their exemptions providing they file for joint bankruptcy. This action is recommended for couples who own plenty of property.
If the state you’re in doesn’t allow you to double your exemptions and you happen to own plenty of property, then you and your spouse are recommended to file individually after the division of property. Filing a bankruptcy during an ongoing divorce kickstarts an automatic stay which will then put the property division process on hold.
Chapter 7 or Chapter 13 Bankruptcy?
Chapter 7 bankruptcy involves liquidation in order to pay off your debts like credit card debt and medical bills. Chapter 7 bankruptcy discharges are received within a few months, which is why it is recommended prior to divorcing.
Chapter 13 bankruptcy, on the other hand, can last a longer period, around 3-5 years, and it requires you to pay off your debts via a repayment plan. If you qualify for Chapter 13 bankruptcy, it is recommended that you go through a divorce first before filing for individual bankruptcy.
While Chapter 7 bankruptcy might sound uncomplicated, filing for it isn’t a simple walk in the park. One must first qualify for Chapter 7 bankruptcy through the bankruptcy means test in order to determine if they can file for Chapter 7 bankruptcy.
What Marital Settlements Agreements Must I Know?
If your spouse is seeking to file for bankruptcy after a divorce, it is recommended that you hire a divorce and bankruptcy attorney who is well-versed in both practices. A divorce and bankruptcy attorney can walk you through issues surrounding both practices including:
- Not Paying Debt in Your Spouse’s Name-You must assume that the debt will be wiped out in your name since it can be such a huge hassle to file for bankruptcy and learn that you still have outstanding balance for an ex-spouse’s debt.
- Difference between Support Ordered and Amount Owed- Support payments such as child and spousal support assists the ex-spouse and their child with living expenses while property division settlement occurs when a spouse takes more property in exchange for an agreement that the other will pay for the property’s value overtime.
Seek Legal Advice from Divorce and Bankruptcy Attorneys
If you and your spouse are going through a divorce, know that it is wise to get in touch with a divorce and bankruptcy attorney in Portland, Oregon. A divorce and bankruptcy attorney can guide you through the process in both practices, helping you reach a resolution that benefits both parties. Contact Michael D. O’Brien & Associates, P.C. by calling the law firm to schedule your appointment.