Considering Bankruptcy And Divorce? What To Know Today

Finding out your spouse has put you into significant debt without your knowledge is one thing, but also discovering that they want a divorce is another problem. If your spouse has racked up tens of thousands in debt, and they want to divorce you, you want to talk with a lawyer right away.

A lawyer can do the undercover work to find out how much debt you have and what you are liable for, and can start putting together your divorce case. Here are some of the things the family law professional will want to do fast.

Financial Assessment

The lawyer will need to do a financial assessment to determine the following things:

  • How much debt there is
  • When the unknown spending started
  • Ability to pay off the debts
  • Savings, investments, and assets
  • Monthly living expenses

The financial assessment will show if it's possible to pay off any of the debts, what type of bankruptcy can be filed, and if any of the transactions were illegal.

Bankruptcy Evaluation

If the debt is extreme the lawyer may suggest that the two of you file for bankruptcy before filing for divorce. This will depend on what type of bankruptcy you are eligible for if you are eligible for bankruptcy. Your spouse must be willing to participate as well, you may have to file for separation while working through the bankruptcy and the divorce.

Chapter 13 bankruptcy will allow you to pay the debts back on a payment plan that is organized by the court system. Chapter 7 bankruptcy will absolve you of most debts. Talk with your lawyer about what option to file for if needed, and what you are most likely going to get approved for.

Illegal Transactions

If your spouse took money out of accounts, signed off on debts, and did things without your knowledge, this could be illegal. Your lawyer may use this to try to get the debts off your record and to remove your responsibility for the debts.  You also may be able to press criminal charges against your spouse in this process, which will help with child custody arrangements and arguments if children are involved in this case.

If you are looking to move the divorce along quickly and you want to get things settled fast, talk with your lawyer about mediating the terms. Your spouse will have to agree to this.

The ability to do mediation may be affected by how long it takes to sort out your finances, and if you are able to press charges against your spouse for financial crimes. Meet with a lawyer right away so you can get the information you need, so someone is working to protect you, and so you can start to figure out your life.

Reach out to a bankruptcy services law firm to learn more.