San Jose Family Law Attorney explains how divorce and bankruptcy are often intertwined for couples.
Financial stress is a leading cause of divorce, and during this very difficult economic period, many individuals and couples are contemplating filing for Chapter 7 or Chapter 13 bankruptcy protection. Depending on your situation, one of both members filing for bankruptcy before you file for divorce may alleviate some of the financial stress on the family.
A married person filing individually for bankruptcy may make sense in certain situations. If a majority of the debts are in one person’s name, there may be enough debt relief in the individual bankruptcy filing to remove the financial stress from the relationship. Examples might include a self-employed individual or business owner who has personally guaranteed debts for the business. Even if the business files for a Chapter 7 liquidation or a Chapter 11 reorganization, the business owner may be personally liable for the business debts, depending on the loan agreement that was signed. If the couple is living together, the court will want to know the spouses income and assets, but relieving one person’s debts may be enough to give the couple breathing room.
If the couple is firmly on the road to divorce, then filing jointly before filing for divorce will save them the expense of two filing fees and can make the property settlement process much smoother. Removal of debts before filing for divorce can remove some of the contentiousness after the divorce, especially if one spouse later files for divorce and the creditor later attempts to collect the debt from the other spouse. A good bankruptcy attorney can work closely with a family law attorney and the couple to ensure a good outcome for each party.
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 California locations including San Jose, San Francisco, Redwood City, Fremont, San Diego, 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