Bankruptcy And Divorce: Which Should Come First In West Virginia?

In this article, you can discover…

• If you should file for bankruptcy before or after divorce.
• What happens to jointly held debt during a divorce and bankruptcy.
• If filing for bankruptcy before divorce makes property division easier.

Should I File For Bankruptcy Before Or After Divorce Proceedings?

Whether you should file for bankruptcy before or after your divorce depends on several factors, but the most significant one is the level of cooperation between the two parties.

If both of you are on the same page and willing to work together, it may make more sense to file a joint Chapter 7 bankruptcy before the divorce. That way, you can eliminate shared debts upfront, rather than having the divorce court divide them between you.

That said, I only recommend filing before divorce if it’s a Chapter 7 case. Chapter 7 bankruptcy is relatively quick and can usually be sorted in three to four months. On the other hand, Chapter 13 takes three to five years, and it is usually not practical for a divorcing couple to stay financially tied together for that long.

If both of you intend to file for bankruptcy separately after the divorce, I’ll usually advise you to work with your divorce attorneys to avoid including restrictive language in the divorce decree, as this can create problems if one spouse later needs to file for bankruptcy.

In most situations, bankruptcy is filed for after the divorce is finalized, but there are definitely circumstances where filing together beforehand makes sense. It really depends on the type of bankruptcy and how willing you are to cooperate throughout the process.

Attorney David Hinkle is a compassionate attorney who has spent the last several decades guiding clients across West Virginia through the bankruptcy process. With his deep knowledge of the law and passion for advocacy, he will help you understand your rights and lead you to the best solution for your situation.

Still have questions? Ready to get started? Contact Hinkle Law, PLLC today to schedule an initial consultation.

You Don’t Have to Face This Alone. Let’s Talk About Your Options - (304) 596-2423

What Happens To Jointly Held Debt During A Divorce And Bankruptcy?

Jointly held debt during a divorce and bankruptcy is one of the more complex situations because it involves the intersection of two legal systems: Family Court and Bankruptcy Court.

Divorce is really a two-part process. First, it dissolves the marriage itself. Second, it divides up property, including the responsibility for debts. For example, if there’s a joint car loan between a husband and wife, the Family Court may award the car to the wife and order her to continue making the payments. Even though both spouses are still legally on the loan, the wife would now be solely responsible under the divorce decree.

It can become complicated if the wife later cannot afford the payments and wants to file for bankruptcy, as the debt now exists on two levels: the legal obligation to the car lender and the domestic support-type obligation to her ex-spouse, which was ordered by the divorce court for her to pay.

Certain debts owed to a former spouse as a result of a divorce are not dischargeable in Chapter 7 bankruptcy. Chapter 13 might come into play because it has a broader discharge and may allow you to address or reorganize those kinds of obligations more effectively.

In short, joint debts that survive divorce and then end up in bankruptcy can be very complicated. There are definitely solutions, but this is one of those areas where it’s critical to have an experienced bankruptcy attorney who knows what to look for and understands both systems working with you.

Can Filing Bankruptcy Before Divorce Make Property Division Easier?

If you don’t have many assets as a couple and are mostly dealing with debt, filing a joint Chapter 7 bankruptcy before the divorce can often simplify the situation by eliminating that debt upfront.

However, often, the better approach is for both of you to communicate clearly with your divorce attorneys and ask the Family Court to assign responsibility for each person’s debts. That way, each of you can file for bankruptcy individually after the divorce if you decide to take that course of action.

The real complications arise when the Family Court orders one spouse to pay the other’s debts as part of the property division or settlement, because this can create difficult situations when bankruptcy comes into play later.

Attorney David Hinkle is a compassionate attorney who has spent the last several decades guiding clients across West Virginia through the bankruptcy process. With his deep knowledge of the law and passion for advocacy, he will help you understand your rights and lead you to the best solution for your situation.

Still have questions? Ready to get started? Contact Hinkle Law, PLLC today to schedule an initial consultation.

You Don’t Have to Face This Alone. Let’s Talk About Your Options - (304) 596-2423

How Do Child Support And Alimony Impact Bankruptcy Filing?

Child support and alimony do not impact a bankruptcy filing because they do not get discharged in any type of bankruptcy. These debts are considered domestic support obligations and are specifically protected under bankruptcy law, meaning you cannot eliminate or reduce them through bankruptcy.

If you have child support or alimony obligations, these payments reduce your disposable income, which can affect how much other debt you might be able to discharge. In other words, these are ongoing, necessary expenses that the bankruptcy court considers when evaluating your financial situation.

How Divorce Can Trigger Bankruptcy, And My Advice For Clients

Divorce is actually one of the leading reasons that people file for bankruptcy. The reason is what I call “divorce math,” essentially the fact that when two people live together, they share expenses and generally have more money because they’re pooling their incomes. After a divorce, each person is responsible for these costs individually, which can create significant financial strain.

The sudden increase in individual expenses often leads to difficulty keeping up with debt payments, prompting the need to consider bankruptcy. I would advise anyone going through a divorce and considering bankruptcy to consult with a bankruptcy attorney as soon as possible, so you have the best chance of obtaining relief for your financial situation.

Still Have Questions? Ready To Get Started?

For more information on bankruptcy and divorce in WV, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (304) 596-2423 today.