A couple’s financial situation is a primary focus of the divorce process. Sometimes a potential bankruptcy of the couple or a business owned by one of the spouses throws an additional wrench into the mix. How to make all this work is often the source of conflict and animosity. One of the advantages of the Collaborative Divorce process is the neutral financial professional, who helps couples make financial decisions. One of those decisions may be about filing for bankruptcy.
More Expenses than Income
All too often, during the divorce process, when it comes to dividing assets and liabilities and creating budgets for the future, a couple discovers essentially for the first time that their expenses far outweigh their income. The financial professional can realistically evaluate the couple’s financial situation and, as a neutral professional, assist them in making the decision about whether the best option for them is filing for bankruptcy.
A bankruptcy attorney can be brought in to discuss with the couple the pros and cons of filing for bankruptcy at this stage of their divorce. The attorney can advise you on what property may legally be exempted from the bankruptcy proceeding, how long the property division will be delayed, and any other complications to the divorce that may arise from filing for bankruptcy.
How Filing for Bankruptcy Affects the Divorce Process
When the bankruptcy petition is filed, an automatic stay is issued concerning property division since all assets now belong to the bankruptcy court. How the assets are dealt with depends on whether you file for Chapter 7 or Chapter 13 bankruptcy. But no matter which Chapter you file under, there is a stay on property division until the bankruptcy proceedings are over.
All other aspects of the divorce can move forward. This includes decisions about child custody and visitation. Child support decisions can also be made.
Heberger & Company Can Help You with Divorce and Bankruptcy
You may need the help of a financial professional when deciding whether to file for bankruptcy during your divorce. Contact us at Heberger & Company an Accountancy Corporation to schedule a free initial consultation to see how we can help. You may also call us at 559-227-9772.