Bankruptcy And Divorce In Orange County, FL: Which Should You File First?

In this article, you will discover:

• The impact of filing bankruptcy during a divorce in Florida.
• Whether you should file for bankruptcy before or after divorce to protect assets.
• How marital debt is divided if you file for bankruptcy first.

What Might Be The Future Financial Impact of Filing For Bankruptcy During A Divorce?

Filing for bankruptcy during a divorce has an impact on your financial future in many different ways. From a bankruptcy standpoint, you now have to operate with just one income when you’re used to operating with two.

Anyone who just took a reduction in income is going to struggle financially, especially if they now have child support, alimony expenses, or rent or a mortgage without a spouse pitching in. That could put you in a spot where bankruptcy is an attractive and helpful option.

Should I File For Bankruptcy Before Or After Divorce To Protect My Assets?

Whether it’s wisest to file for bankruptcy before or after divorce depends on your situation. Some people try to file bankruptcy first because they anticipate coming into some assets as a result of the divorce. However, a skilled bankruptcy trustee might want to see the divorce’s outcome before they’re willing to file the final paperwork.

In some instances, when you file doesn’t make a difference. It ultimately depends on the facts of the case. Do you have any joint debt? Do you have pre-marital or marital assets?

For couples who live together until they’re divorced, it’s often better to file for bankruptcy after your divorce. If you live together, your spouse’s income has to be considered, which could mean you won’t qualify. Once you’re divorced and live separately, your spouse’s income will no longer be relevant.

How Are Marital Debts Divided If I File Bankruptcy Before Divorcing?

Division of marital debt when you file bankruptcy first depends on the situation. Suppose both parties had their own debt and didn’t share any debt. That makes the divorce case simpler. Both parties keep their own debt and move on from each other and the marriage.

If you’re arguing back and forth in a contested divorce, there could be situations where you must agree to pay some of the debt that isn’t in your name. If that happens, bankruptcy won’t be helpful as the judge has issued a final order stating you must pay your spouse’s debt. You can’t bankrupt out of that obligation based on the family law aspect of the case. A judge’s order, in that sense, has more power than a standard judgment does.

The facts of the situation make the difference. In most divorce cases, if you file bankruptcy first, it’s to your advantage to pay all debts you’re responsible for. It’s a way to tell your spouse they don’t have to pay anything for purchases that benefited them while you were married.

Attorney Alec Solomita is an experienced lawyer based in Orlando, FL, who has helped countless clients like you navigate the intricacies of bankruptcy law. With more than 17 years of experience, he is prepared to assist you in deciding whether to file for bankruptcy or divorce first to best protect your assets.

Still have questions? Ready to get started? Contact the Solomita Law, PLLC today to schedule an initial consultation.

What Are The Biggest Mistakes People Make When Handling Bankruptcy And Divorce Together?

The biggest mistake people make is not talking to a bankruptcy and family law attorney. They don’t need to be the same person, but you need both perspectives to understand your case.

A bankruptcy attorney needs to know:

• Is the divorce contested?
• Are there considerable assets at stake?
• What kind of marital debt do you have with your spouse?
• If you share debts, do you agree on how to handle them?
• Are there multiple properties at stake?
• Are there vehicles, and who gets them?

Depending on your answers, your attorney may want to wait until your divorce is settled before filing for bankruptcy, which gets you the relief you want. However, the opposite may apply: you may need to file bankruptcy sooner rather than later for instance, if you’re being sued.

In some cases, once you start receiving child support, you may not qualify for Chapter 7. In that case, you would need to file before that extra income becomes a factor.

A divorce attorney will not be as concerned with your bankruptcy petition. However, from a family law standpoint, they may advise you not to file for bankruptcy until after you divorce, as this could hurt your case. In addition, you could use certain assets as leverage in bankruptcy after you’ve divorced.

What Happens When One Spouse Wants To File Bankruptcy, But The Other Doesn’t?

This happens often. Many married people call me, but only one of them wants to file. While I can’t force both spouses to file, I don’t charge extra for a joint bankruptcy.

If one spouse doesn’t want to file, I’ll speak to them separately if they’re willing. The most significant selling point is it’s not going to cost any extra money. If one spouse doesn’t file with the other, they’ll likely come back in six months, ready to file and face one of two consequences:

• They may not still qualify to file
• They will have to pay another fee for filing separately

Instead of filing jointly for one fee, they now have to pay twice. It’s great for my wallet, but it’s not great for theirs. It would be best to file for bankruptcy jointly and avoid these extra expenses and extra stress down the road.

Still Have Questions? Ready To Get Started?

For more information on filing for bankruptcy and divorce in Orange County FL, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (407) 305-5599 today.