Financial problems is one of the reasons people in St. Petersburg and throughout the Tampa area run into marital difficulties.
It happens often that divorce immediately precedes, or follows, a person’s financial collapse. As a result, a person could want to explore the debt relief options bankruptcy affords even though he or she is also going through a profound family change.
Whether and when a person going through or expecting a divorce should file for bankruptcy is a question that depends on an individual’s facts and circumstances. Someone interested in taking this step should consider speaking with an experienced bankruptcy attorney.
There are some limits to what a bankruptcy can do for a divorcing Floridian
Still, there are some issues that Floridians should be aware of when they are considering whether or not to file a bankruptcy around the time of their divorce.
For one, there are special rules that apply to certain divorce-related debts which can make these debts harder to discharge. Child support obligations, for example, generally are not dischargeable in a bankruptcy.
It is also important to remember that, if only one person files for bankruptcy, only debts in that person’s name get discharged.
In the case of a joint debt, the creditor may try to hold the other spouse responsible for the debt, which could in turn land the matter back in front of a family law judge.
Filing for bankruptcy during a divorce requires careful consideration
Still, there are benefits to filing for a joint Chapter 7 or Chapter 13 bankruptcy with one’s estranged spouse.
At a minimum, doing so saves on filing fees and other costs. It also allows the couple to discharge most of their debts which they otherwise would have to divide in a divorce. Couples who take this route also increase their ability to claim property as exempt from being sold to pay off their creditors.
On the other hand, in order to meet the income requirements to file a Chapter 7 bankruptcy, a Florida resident may want to divorce first so that his or her spouse’s income falls out of the calculation.
It is also important to remember that a joint bankruptcy will require cooperation between estranged spouses. In particular, a Chapter 13 bankruptcy could require such cooperation for years while the couple is working to meet their court-approved payment plan.