Wink & Wink’s Bankruptcy Lawyers are Here to Help You Navigate This Difficult Time
Our clients often come to us with financial challenges that have occurred during and after a divorce. This is understandable, as there are many reasons that people need the expertise and strategic help of bankruptcy and debt settlement attorneys at this time.
Our clients sometimes recognize that it is time to file for bankruptcy as their financial situation contributed significantly to the reason they’ve decided to divorce, or divorce has made their financial challenges more difficult. Additionally, a client who is recently divorced may be having trouble paying alimony or child-support payments, and wants to understand how bankruptcy or debt settlement can help mend their financial situation.
Wink & Wink understands our role as a leading bankruptcy attorney near you. We listen carefully to our clients’ challenges, navigate the legal process for you, and offer a brighter picture for your financial situation down the road, and this includes any difficulties with debt during or after a divorce.
Bankruptcy and Divorce: Filing for Bankruptcy Jointly
One question we get from clients is whether they should file for bankruptcy jointly. We’ve outlined some of the reasons a divorcing couple may choose to file this way:
- It costs far less than filing on one’s own, and can discharge the debt of both parties.
- When debt is discharged jointly, neither party has to worry about the other being responsible for managing a joint debt individually, as various former joint responsibilities will be assigned during a divorce. This way, both parties are reassured that the other is not going to fall short on a joint debt, which could require additional legal action down the road. In this way, bankruptcy before divorce can simplify the divorce.
- With the debt taken care of, the process of dividing assets in a divorce can also become simpler.
- Bankruptcies in Colorado allow you to claim certain exemptions on property that creditors cannot collect to settle your debt. When you file jointly, those exemptions are doubled in most cases.
- Keep in mind, too, that a divorcing couple may choose to file for bankruptcy together because to do so individually will incur expenses for both individual filings that could have been taken care of as a single, joint filing.
- It is possible that filing for bankruptcy prior to divorce can put the couple under the median income threshold and make chapter 7 bankruptcy possible for both, whereas filing after bankruptcy could leave one of the couple having to file Chapter 13 because they make too much for Chapter 7. This tends to occur when one of the couple is the primary breadwinner.
Filing for Bankruptcy as an Individual During or After Divorce in Denver, Aurora, or Lakewood
While filing a joint bankruptcy prior to divorce can make sense in certain situations, it is sometimes better to file as an individual after divorce, or at least after separating from their spouse. We’ve outlined some reasons why it is better to file bankruptcy as a separated or divorced individual:
- If a couple really cannot work together because of problems in the relationship, then a joint bankruptcy is likely impossible because filing a joint bankruptcy will require cooperation and information sharing.
- While domestic support obligations cannot be discharged in bankruptcy, other liability from a divorce decree like attorney’s fees can be discharged. And obligations to your ex-spouse from the divorce decree that are not in the nature of domestic support, like property settlement payments, may be discharged in Chapter 13 bankruptcy.
- The divorced couple may each be under the median income threshold as individuals but over the median income for a two-person household. In this case, the divorced or separated couple can each file for Chapter 7 bankruptcy, which would have been impossible if filing bankruptcy before separating. While a married person can file bankruptcy without their spouse, their spouse’s income is looked at as part of the household income. The requirement of including your spouse’s income in your bankruptcy ceases once you are separated or divorced.
- A couple may own significant unprotected joint property which could mean bankruptcy is not cost-effective as a couple. However, if one spouse is allocated that property in divorce, bankruptcy for the other spouse after divorce can become cost-effective.
Most Importantly, Our Clients Need Expert Bankruptcy Advice During a Divorce
At Wink & Wink, our goal is to provide strong counsel and experienced legal assistance, no matter the situation, so that you can come away from this very challenging time in the best financial shape possible.
Our team of leading Denver bankruptcy lawyers near you can help you weigh the pros and cons of a joint or individual filing, and help you find a solution that incorporates all of the specifics of Colorado law into your case to ensure the best possible outcome.
Domestic Support Obligations in Bankruptcy
Wink & Wink, the leading bankruptcy and debt settlement attorneys near you, also receive questions about child-support and alimony, and how these financial responsibilities relate to bankruptcy.
Consider the following:
- If you file for Chapter 7 or Chapter 13 bankruptcy, you will be able to discharge certain debts. Can you discharge child support or alimony during bankruptcy? No; you still have an obligation to ensure that a child and your former spouse’s needs are being met. The terms of your bankruptcy, however, can potentially help you pay down other debts, so your domesitc support payments are more manageable.
- Obligations which are not in the nature of domestic support may be discharged in Chapter 13 bankruptcy. Our team of Denver bankruptcy attorneys near you will be able to help you determine if this is relevant to your situation. The terms of divorce are different for every couple, and – just as a lawyer was needed to end the marriage – it is wise to consult with a bankruptcy and debt settlement attorney when trying to achieve the best outcome.
A Free Consultation with Wink & Wink Could Be Your Turning Point
If you’re feeling frozen or frustrated about what to do next in relation to bankruptcy and divorce, Wink & Wink’s team of Denver bankruptcy lawyers can offer you free consultation at one of our offices near you, and patiently help you work through key decisions that need to be made during this challenging time.
Schedule your free consultation with Wink & Wink, a team of strategic, experienced bankruptcy attorneys near you. Call us at (303) 410-1720, or send us a message online, and we can help guide you to the hopeful future you deserve.