Divorce and bankruptcy both offer much-needed fresh starts for most Florida residents. Though the decision to file for each one is a difficult one, once people decide they want to go down either route, they often want the process to end quickly so they can move on. While individually each legal procedure might not take a lot of time, those couples who are filing for both may find themselves going down a long and complicated road if they are not careful.
How divorce and bankruptcy are related
Divorce is often the leading cause being bankruptcy and monetary problems often lead to the demise of a marriage, so it should not come as a surprise that the two go hand in hand. However, before filing for both or one or the other, there are a few things filing couples should know, the most important of which is that couples should not file for both at the same time. Once someone files for bankruptcy, an automatic stay puts a freeze on the assets and property and this hold remains until the end of the bankruptcy process. However, this makes it impossible for the family court to access and divide the assets, which is an important part of property division in a divorce. This can end up dragging out a divorce.
Depending on one’s situation, couples should decide which one to file for first. Many decide to file for bankruptcy first, allowing them to split the costs associated with it while taking advantage of double asset exemptions. It also simplifies property division, as the bankruptcy court has already divided it. Chapter.7 bankruptcy is also the quicker option, as dischargeable debts can be discharged within six months, compared to three-to-five years in Chapter 13 bankruptcy. However, it is important to keep in mind that not all debts are discharged in any bankruptcy and those may need to be divided during the divorce.
Ensure that you make an informed decision
Both divorce and bankruptcy are complex and have a considerable effect on one another. It might be beneficial to consult an experienced attorney for guidance related to one’s individual situation to determine which to file for first and how to navigate these legal waters.