Knowledgeable Guidance When Divorce And Bankruptcy Intersect

Significant debt can complicate both a marriage and a divorce. No matter the source of the debt, it can lead to tense exchanges and additional stress on spouses.

At The Siemon Law Firm, we have worked with families across Atlanta and northern Georgia for decades. We understand that bankruptcy and divorce are two of the most stressful and emotionally challenging situations you may encounter. When you face both simultaneously, our lawyers can help you efficiently navigate the processes ahead.

Which Comes First: Divorce Or Bankruptcy?

Whether to first file for divorce or bankruptcy will depend entirely on your unique situation. Generally, if you and your spouse are on amicable terms, it can be advantageous to file bankruptcy first if your joint income qualifies you to file a Chapter 7 bankruptcy. This can also help to streamline the property division process in an eventual divorce. Chapter 7 can eliminate most unsecured debts, including:

  • Credit card debt
  • Debt from medical or hospital bills
  • Personal loans
  • Utility bills

However, Chapter 7 will not discharge or eliminate all types of debt. You will still be responsible for paying alimony or spousal support payments, child support obligations, student loan debt, certain recent tax debt, court fees, government fines or penalties, and more.

When you are not eligible to file a Chapter 7 bankruptcy, it may be beneficial to divorce first before filing bankruptcy separately. This is for two main reasons: 1) Filing a Chapter 13 bankruptcy can take far too long for a couple planning to divorce 2) This could allow both spouses to meet the eligibility requirements for a Chapter 7 bankruptcy separately.

Simultaneously Filing For Divorce And Bankruptcy Can Be Detrimental

Filing for divorce and bankruptcy at the same time can cause significant delays. When you file bankruptcy, the bankruptcy court puts an “automatic stay” in place. This immediately suspends creditors or lenders from contacting you and freezes your property and assets. This freeze can complicate the property division process of divorce. If the family court cannot access your assets in order to divide them, the process may be placed on hold, which will then delay your divorce.

Get Started By Contacting An Attorney

When family and financial issues intersect, working with an attorney knowledgeable in both legal areas can prove to be beneficial. Get started by contacting an attorney at our offices in Alpharetta, Atlanta, Cumming or Marietta. Schedule a free consultation by calling 770-888-5120 or emailing us through our online contact form.