Can I File For Bankruptcy At The Same Time That I File For Divorce?
Filing for bankruptcy at the same time that your divorce is pending with the court is really not a good idea. When a person files for bankruptcy, an automatic stay is put in place. What this means is that no creditor can collect on debts owed by that person until the bankruptcy is finalized. Also, the person’s assets and debts become the property of the bankruptcy estate.
Therefore, should the same individual be going through a divorce at the same time, the family court may be unable to divide and distribute assets and debts until the bankruptcy has been completed.
Similarly, the family courts tend to consider the divorce proceedings to also be on hold until the bankruptcy is finalized and will wait for the bankruptcy to be completed before continuing with the divorce proceedings.
On the other hand, the bankruptcy court may want the family court to finalize the division of the assets and the debts before finalizing the bankruptcy. Thus, this can lead both the bankruptcy court and the divorce court coming to a complete halt, waiting for one or the other to finalize their proceedings before they continue with the other.
Therefore, it is better to file one or the other first and not both at the same time, as it will make it for a clearer picture of the parties’ assets and debts, for both the bankruptcy and the family court. Doing so will also avoid any delays or any complications with either process and result in a quicker and simpler resolution.
There are other considerations that you have to take into effect when deciding which to file first or if you want to file them both together. This can affect the type of the bankruptcy that you can file and it can have different implications depending on the bankruptcy that is filed. So, ultimately, I suggest that if you are contemplating filing divorce and bankruptcy that you speak to an attorney about your particular situation to see how it can affect you and avoid any negative consequences for you.
If you’re contemplating filing for bankruptcy, divorce, or both, the attorneys at LJ Law can help guide you through a process that makes the most sense for you. Contact our office to speak to an experienced bankruptcy attorney or an experience divorce attorney. We can be reached at (702) 998-1188, info@ljlawlv.com, or by scheduling a consultation online.
For more information regarding divorce, bankruptcy, or other family law or debt settlement topics, check out our Family Law Blog, Bankruptcy Law Blog, podcast, or Youtube channel for other frequently asked questions.