San Jose Family Law Attorney explains how bankruptcy may benefit couples filing for divorce.
The current severe recession may affect many couples considering filing for divorce in ways they had not expected. The assets they hoped to divide may have dramatically shrunk, and the debts they have incurred may be much larger than they anticipated. All of this means that your family law attorney will be extremely valuable as you consider your divorce proceedings.
In a community property state such as California, the debts of a couple will be shared as equally as the assets. That means couples with heavy debt loads may want to consider a bankruptcy filing to clear out the debts before they file for divorce. A Chapter 7 bankruptcy filing can clear out a large unsecured debt load. A Chapter 13 bankruptcy filing may allow a couple to reduce their debts and save their home from foreclosure. An added benefit of the bankruptcy filing may be that the debt removal may make the divorce process much less contentious.
For example, if one of the spouses is required to pay half of the unsecured debts, he or she may file a Chapter 7 bankruptcy to erase the debt from his or her credit record. While the debt may not be dischargeable in bankruptcy, the lender is free to pursue the full amount from the other spouse. Filing a joint bankruptcy before the divorce proceeding could remove this possible scenario from the divorce settlement process.
Your divorce attorney can help you structure a settlement that can guard against a former spouse ruining your credit rating by failing to repay debts. Consulting with a bankruptcy attorney may make that process much smoother.
Here at Sagaria Law, we offer a full range of family law and legal services including divorce, paternity, adoption, child custody and visitation matters, child support, spousal support, alimony, juvenile dependency, domestic violence, division of property, grandparent visitation and custody, etc. We have seven Northern California locations including San Jose, San Francisco, Redwood City, Fremont, Salinas, Roseville and Sacramento. We offer a free thirty minute consultation, either in person at any of our offices, or over the phone. Call our offices today and we can connect you with an attorney immediately or we can schedule your free consultation with one of our family law attorneys : (408) 279-2288 or (800) 941-6730 or visit www.sagarialaw.com.