If you are contemplating filing for bankruptcy and divorce in Tulsa, Oklahoma, it is probably a very stressful time for you and your spouse. Finances are seriously affected in both instances — divorce is actually one of the top reasons couples file for bankruptcy.
The following tips will help minimize the negative impacts of both bankruptcy and divorce. While this time in your life may be overwhelming, it does not have to be unbearable.
Don’t File for Bankruptcy and Divorce at the Same Time
This is a common issue that happens quite frequently. Most bankruptcy and divorce attorneys will encourage you and your spouse to file for bankruptcy first. If you file for bankruptcy first, the court will put a stay on your assets and debts, making the divorce impossible to complete.
While a stay is in place, assets and debts cannot be divided in a divorce action. Filing at the same time means your divorce will take longer, become more stressful, and can cost more to complete.
If You Have a High Conflict Divorce
For some couples, it is not possible to file for bankruptcy first. If you and your spouse are on good terms, then bankruptcy is the ideal first filing. However, if you have a possible high-conflict divorce or you and your spouse don’t meet the income requirement for a bankruptcy, then divorce might be better for you to file for first.
The benefits to filing bankruptcy first include:
- Sharing of attorney fees
- No joint liability on debt payments
- Double exemptions on assets
- Simplified divorce later down the road because most assets and debts are divided during bankruptcy
If you and your spouse do not get along but realize the benefits of filing bankruptcy first, it may convince you to work together toward an easier common goal.
A Quick Divorce Process – Chapter 7
If you and your spouse are agreeable and want to complete the bankruptcy process before the divorce, then Chapter 7 bankruptcy is the best option. Chapter 7 bankruptcy is able to erase all debt in a matter of three to six months, and you will be able to file for divorce sooner.
In a Chapter 12 bankruptcy, the debt payoff process can take three to five years. Although you can divorce during a Chapter 12 bankruptcy, you must either restructure or cancel the repayment plan after the divorce is final. If you choose to cancel the repayment plan, all debt is reassigned to you and your spouse, not an ideal situation.
Chapter 12 bankruptcy also does not discharge all debt. The following is not eligible to be discharged in a chapter 12 bankruptcy:
- Alimony
- Child support
- Debts to government agencies
- Student Loans
- Court Fines
- Attorney Fees
In addition, a debt cannot be discharged if:
- The application fails to include required tax documents.
- You hide property for purpose of defrauding.
- You destroy financial records.
- Commit perjury in your case.
- Violate a court order.
- You do not complete a credit counseling class.
Multiple Attorneys
Lastly, if you file for bankruptcy and divorce at the same time, you will likely have two attorneys with two separate legal fees. This can be overwhelming for finances and stress. Securing a bankruptcy attorney first will allow you to save on your divorce attorney because a lot of the work and division of assets and debts already will be completed.
Free Consultation with a Tulsa Divorce Attorney
Consult an attorney as soon as possible if you are thinking of filing for bankruptcy and divorce in order to better understand your rights and options. An attorney can help advocate on your behalf and advise you on your best options.
Hiring a knowledgeable and compassionate family law attorney will ensure the process is expertly conducted and your interests are well represented.
Contact an experienced Tulsa family law attorney when you need to go through the Oklahoma divorce process.
For a free confidential consultation, call now: 918-924-5526.
