Spouses surrounded by all of these tense situations may wonder which filing they should initiate first? Do the divorce papers come first or do you file for bankruptcy while still married? What would the effects be on asset distribution if a bankruptcy petition is filed? How is real estate affected? What about investment property or vacation property? How about the collectibles, jewelry, stock investments and portfolios, bank checking and savings accounts, IRA's, and household items? What happens to these things in the event of filing for divorce? What happens when the couple files for bankruptcy? All these questions need to be examined and addressed by experienced attorneys.
Each Situation Is Unique
Just like each marriage is unique and like no other, so is each divorce proceeding and/or bankruptcy claim. It is important not to base your own decision on stories you have heard about others who have experienced one or more of the scenarios. Your marriage assets and debts need to be discussed and evaluated before a final answer can be given on which situation you should deal with first; the divorce or the bankruptcy.
Family Law And Bankruptcy In New Jersey
There are some factors to keep in mind as you begin to move forward in the divorce and bankruptcy process. If a married couple files for bankruptcy together, which is termed one filing, the cost is less. Therefore, one filing will be cheaper for both parties. However, if you file one filing, you may have to stay married until all the bankruptcy paperwork is complete. If you divorce first, each spouse has to file separate bankruptcy papers, or two filings, which is more costly.
It is important to understand that no matter when you file for divorce or when you file for bankruptcy, no child support obligation will be waived. This is true if you file jointly or file two bankruptcy filings. You are still responsible for any child support payments imposed by the court or agreed up on in a divorce settlement, regardless of your bankrupt status.
If you have credit debt that you do not include in your bankruptcy, the creditor is legally able to hold both you and your spouse responsible and liable for the debt. It does not matter what the divorce documents state, both parties are accountable for the non-declared debt. It is vital that you and your spouse make a record of all debts and consider them as factors before you declare bankruptcy.
Contact Villani & DeLuca
Filing for bankruptcy while going through a divorce is very complex. It is a challenging legal situation and there are tax implications. These implications need to be weighed and considered by both divorcing parties. A legal expert should be on hand to navigate divorcing parties through this difficult situation. If you are considering filing for divorce and / or filing for bankruptcy or even if you just have initial questions regarding these situations, you should speak with any attorney before proceeding any further. Villani & DeLuca serves Ocean and Monmouth County residents and our experienced and trained attorneys are here to provide you support as you undergo what is certain to be a difficult and life changing process, whether that is a divorce proceeding, a bankruptcy filing or eventually both types of proceedings. Villani & DeLuca, P.C. has a bankruptcy law practice serving New Jersey residents interested in filing for bankruptcy.