It can be challenging to think of two legal proceedings that have as much power to make as much of a swift impact on both your personal and financial life as divorce and bankruptcy does. Because of the fact that both of these proceedings are associated with such negative connotations, it can be overwhelming to imagine that you may have to consider both at the same time.
While it is not entirely common that divorce and bankruptcy become a necessity at the same time, anything is possible. This stands to be especially true when it comes to the life-altering results that divorce or a bankruptcy can have on your life.
If you are considering, in the midst of, or finishing up either divorce or bankruptcy proceedings, you may find yourself in need of the other. There are a few things you should know about the process of the simultaneous need for both divorce and bankruptcy.
You Must Evaluate Your Needs
It can be tempting to get all of the hardship that comes from divorce and bankruptcy out of the way in a short amount of time, but it is important to take a step back and determine whether each of these proceedings is truly necessary and applicable to your situation. For example, there are various alternatives to divorce, such as separation and mediation, and you may be able to work out a payment plan without filing for bankruptcy.
Looking at your situation, talking to an attorney, and determining the best course of action can not only take a load off of your shoulders, but it can also allow for the avoidance of more emotional and financial turmoil in a time that will already be stressful.
You Need to Consider the Order in which you File
While it is not impossible to file for divorce and bankruptcy simultaneously, the fact that the processes are happening at the same time may make things difficult for you, the court, and your representative. With so many overlapping legal issues, the logistics of your proceedings can get messy– and fast. With that, there are some considerations you should take into account when it comes to what order you file in and how you decide to file.
For example, it may be more economically efficient for you and your spouse to file something called a joint bankruptcy, which is when a married couple files for bankruptcy together, before getting a divorce. Filing a joint bankruptcy will likely result in you saving money in areas such as attorneys’ fees and court filing fees. Additionally, you will be saving time spent on your bankruptcy proceeding because both you and your spouse will both be working toward the same goal- getting the bankruptcy process over with.
Alternatively, however, you and your spouse may want to consider filing separate, individual bankruptcy proceedings after getting a divorce. This may be the best option for you if your joint income as a couple does not meet the Colorado means test and you would benefit from filing a Chapter 7 bankruptcy (as opposed to a Chapter 13 bankruptcy). Additionally, filing individual bankruptcies following your divorce will likely be helpful if there is any alimony or child support finalized in the process that can be included in your bankruptcy proceeding.
Regardless, it will be Emotionally Draining
It is important to remember that filing for either bankruptcy or divorce, whether you do it simultaneously or not, is emotionally draining. Each process involves carefully taking account of hardships in your past, coping with some kind of loss, and getting ready to make big changes to your life. That being said, it is important that you keep in mind your capacity to deal with the stress.
Whether you are preparing to file for divorce, bankruptcy, or juggling both, you deserve to have someone on your side. Contact our bankruptcy and family law specialists to learn more about what your options are and how we can make it easier.
Photo by Eutah Mizushima on Unsplash