San Diego Divorce and Bankruptcy

Divorce and bankruptcy are close enough to be kissing cousins. Lots of time, one follows the other. Financial troubles often are a major factor in the breakdown of a relationship. And if things were bad before the divorce, once the parties have to pay to operate two households instead of one, it's even worse.

WHAT TO DO?

If you're married and considering divorce, get information about bankruptcy BEFORE the divorce is final. If you and your spouse can get along well enough to file a Chapter 7 bankruptcy before your divorce is final, you can probably avoid paying the additional attorney fees and filing fees you would have to pay if you file bankruptcy separately. That can be a good chunk of change. Filing a Chapter 7 bankruptcy jointly, even while the divorce is going on, can be an especially good thing, because it can also make the divorce much simpler. No long billable hours trying to figure out who should pay which debts. Just chuck them all into the Chapter 7. Chapter 13 bankruptcy is, well, problematic for a divorcing couple. That's because it requires the cooperation of the parties for the whole length of the Chapter 13 plan, which is at least three years and can be as long as five years. Who wants that long-term commitment to a transaction with a person you're trying to get away from? A Chapter 13 bankruptcy happens when there is some really good reason not to file a Chapter 7 bankruptcy, or sometimes for other reasons. Mostly, it's when the "debtor(s)" have enough income to live on and then some - maybe a couple hundred bucks a month - left over. That extra money goes the Chapter 13 trustee who then pays what's required to the creditors. Chapter 7 bankruptcy might just give the "community" enough relief for the two or you to figure out if the other seemingly insurmountable problems in the relationship can maybe be resolved after all. Or not.