Bankruptcy and Divorce – The Double Whammy?
Sometimes bankruptcy and divorce can go hand in hand. In some cases financial trouble has caused the marital strain. In other case, marital strain from something else often leads to financial trouble. It’s no surprise then, that many couples face these two challenges at the same time. And there can be a downside to it as it adds a layer of complexity that otherwise would not exist. But don’t panic. There have been many similar cases and the Courts have found reasonable ways to work through both at the same time. Divorce Online has an informative article about how these two legal issues can affect each other and you:
What Happens to Property if My Spouse Files Bankruptcy?
When a spouse decides to file bankruptcy, all property acquired during the marriage becomes a part of the bankruptcy estate.
That property may be sold by the bankruptcy court in order to repay debts, depending on which type of personal bankruptcy is filed (Chapter 7 or 13).
But don’t panic—in many bankruptcy cases, most property is considered exempt and the debtor gets to keep all or most of his or her assets.
In any case, you and you’re spouse’s property may not be divided by the divorce court until the bankruptcy trustee decides whether the property is exempt.
Bankruptcy & the Automatic Stay: Could it Help Me?
When a person files bankruptcy, they receive the protection of the bankruptcy automatic stay, which is a legal order that prohibits creditors from trying to collect on most types of debt.
Do you need help from the divorce lawyers Knoxville trusts? Call us today for a free consultation with an experienced and qualified attorney.
Are you struggling with bankruptcy? You can speak to a Knoxville bankruptcy attorney at no charge and with no obligation. Simply call us today to set up an appointment.
