As an Asheville bankruptcy lawyer, I have witnessed firsthand the damage financial stress can do to a marriage. Senator Elizabeth Warren did a study which concluded that divorce is one of the three main factors which force consumers to file for bankruptcy protection. Indeed, according to the study, over 90% of bankruptcy cases are linked to medical problems, divorce, or a job loss. I’ve never consulted with anybody who has chosen these unfortunate life events. Frequently the most efficient way to pick up the pieces and move forward is by filing for bankruptcy.
A married couple, prior to a divorce being final, can file a joint bankruptcy case together even if they are no longer living together. Using this strategy can save money both on the bankruptcy court’s filing fee and the bankruptcy attorney’s fee. In my office, the savings on the attorney fee is substantial because I quote fees based on the amount of time and effort I put into a case. There is a potential for conflict when representing separated spouses, but if no major disputes between the parties, going with the most economic option might make the most sense.
Furthermore, a bankruptcy case can help make property division easier in the divorce proceedings because the separating spouses do not need to argue about who is responsible for any debts discharged in their bankruptcy case. Instead, they can focus on splitting up their property in a fair manner without worry about their former debts.
There are many nuances to the intersection of bankruptcy and divorce law. It is very important to get competent advice from an experienced bankruptcy lawyer who can advise about which steps to take and when to take them. But when your marriage is breaking up, bankruptcy can be a positive first step to making a fresh start for both you and your ex-spouse.
For those of you in Western North Carolina, I would be please to speak with you during a free initial bankruptcy consultation.
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