What happens when divorce and bankruptcy overlap?
As a Tampa FL divorce attorney can tell you, money problems are one of the main causes of failed marriages. In turn, divorce can lead to substantial money problems. Divorce is an already stressful ordeal, but what happens when a partner endures money problems that require them to file for bankruptcy? Sometimes divorce and bankruptcy overlap. Dealing with divorce and bankruptcy at the same time can seem impossible to handle. The following are some important things to consider when a divorce and bankruptcy overlap. For more information about handing divorce and bankruptcy proceedings at the same time, contact a Tampa FL divorce attorney from The McKinney Law Group.
Chapter 7 vs. Chapter 13 Bankruptcies
A Chapter 7 bankruptcy liquidates all unsecured debts. Typically, all debts are discharged within a few months. To qualify for a Chapter 7 bankruptcy, there are certain income and means requirements that must be met.
A Chapter 13 bankruptcy is different in that it requires a repayment plan to pay back debts within 3 to 5 years. If you make too much money to qualify for a Chapter 7 bankruptcy, this is the next best option. Regardless of which type of bankruptcy you opt to pursue, you may be best served by working with a Tampa FL divorce attorney who can guide you through the process.
Should I File for Bankruptcy Before or After My Divorce?
Assuming both spouses intend to file for bankruptcy, there are a few things to consider when determining whether to file for bankruptcy before or after your divorce:
- Time: If you are filing for a Chapter 7 bankruptcy, it can be done before a divorce since it only takes a few months. Since a Chapter 13 bankruptcy process can take up to five years, it might be best to file after the divorce.
- Allocation of Debts: If you and your spouse are both responsible for the debts, it is generally easier to file for joint bankruptcy before divorcing. Otherwise, regardless of who is assigned to repay a debt in a divorce, both spouses are still deemed responsible for the debt. Talk to a Tampa FL divorce attorney if your spouse and you disagree about who is responsible for which debts.
- Property Division: If you and your spouse jointly own most of the property, then it is generally easier to divide the property after a joint bankruptcy. However, you should ensure that your state allows enough exemptions to protect the property. Some states allow more exemptions if you file jointly; if your state does not, it may better to wait until after the divorce to file.
- Qualifying for Bankruptcy: A joint income while married may hurt your chances of qualifying for a Chapter 7 bankruptcy. Conversely, if you are divorced then your individual income will be less and may improve your chances of eligibility.
Whether to file jointly before a divorce or individually after a divorce largely depends on your situation, as well as the laws in your state. A divorce attorney in Tampa FL can provide you guidance based on your unique circumstances.
What To Provide Your Divorce Attorney
Tampa FL divorce attorney Damien McKinney explains what to bring with you when you’re getting ready to divorce. This checklist helps us strategize how to obtain an outcome that is as close as possible to what you want.
Preparation goes a long way towards helping you obtain the results you need from your divorce. When you compile bills, statements, and other records, we’re able to get a clear understanding of you and your spouse’s lifestyle, plus past and current situations.
These documents also support why the outcome you want is the right one for you and your children. It’s not an exhaustive list, because each case is unique, but it’s an excellent start. To find out what you need for your case, contact Tampa FL divorce attorney Damien McKinney.
In order to divorce in Florida, you need to prove you’re married and that at least one spouse has lived in Florida for 6 months — although, please note that if you or your spouse is serving in the military in Tampa or another military base, the rules may be a little different for you.
Marriage documents can include:
- You can prove you’re married with a marriage certificate.
- Bring any prenuptial or separation agreements.
- Bring personal identification for you and, if possible, your spouse.
- Bring other proofs of residence as needed.
- Financial Documents
Your financial documents are a requirement to divorce. Within about 6 weeks of the Petition for Dissolution of Marriage, the initial filing that starts your divorce process, you and your spouse will have to disclose your finances.
Since financial disclosures are often the basis of why we negotiate for certain outcomes, it’s vital to your case that you are upfront and transparent.
The McKinney Law Group is experienced with a variety of financial situations, whether in your prior residence or in Tampa FL. Divorce attorney ethics are clear here. Our job is to help you get your desired outcome, not judge your finances, so don’t withhold information here.
If you’re worried your spouse may be hiding or may try to hide assets, bring every piece of paperwork you can find that is related to what you think may be hidden. We can help you understand how you might do that if you’re not sure.
Financial documents may include:
- Personal and business tax returns for the past 5 years
- Proof of income, including pay stubs or offer letters
- Benefit statements, like company stock awards or insurance policies
- Bank account statements, including personal, business, or savings
- Other financial account statements, like stock portfolios or trusts
- Mortgage documents and household bills
- Documents for Your Children
If you have children, we work hard to make sure all choices, decisions, and outcomes related to them are in their best interests.
Emotions can run high when it comes to the matter of your children in a divorce, so we look at the real situation and listen to your explanation of the documents in order to understand what’s best for them.
Your children’s documents may include:
- Birth certificates, indicating parentage
- Tuition receipts and other school expenses
- Medical bills or insurance policy costs
- Daycare receipts and related expenses
- Expenses related to special needs
- Other Documents or Evidence
There may be other documents or evidence we require in order to make the strongest case possible for you. As we learn more about your needs, we can let you know if this comes up.
Other evidence can include:
- Your will, including any living wills
- Health directives
- Powers of attorney
- Personal testimony
- Testimony from third parties
- Interviews with your children
If you have been a victim of any kind of abuse, including psychological, physical, sexual, stalking, or harassment, please let us know immediately. We can help you understand how to stay safe and direct you to the appropriate resources.
In these instances, please provide us with copies of police reports you may have, too.
Hiring Legal Help
If you are approaching both a divorce and bankruptcy, it is imperative to have an experienced divorce and bankruptcy lawyer. Contact an experienced Tampa FL divorce attorney who can help you determine the best course of action to take. A divorce attorney Tampa FL community members turn to can advise you as to what may be your best options.