When going through a divorce, there are a considerable number of financial matters that must be taken into account, from whether or not you will pay alimony to how your property is distributed. However, one element that you may not have considered before filing is what happens if your spouse files for bankruptcy during your divorce. Unfortunately, this can leave you with many questions and understandable concerns. As such, the following blog explores what you should know about the impact of bankruptcy on your divorce and the importance of working with Morristown divorce lawyers to assist you through these difficult times.
How Can Bankruptcy Impact the Outcome of My Divorce?
In the event you are notified that your spouse has filed for bankruptcy, it’s important to understand that your spouse will be granted what’s known as an automatic stay. This essentially stops all collection efforts against your spouse, including lawsuits, wage garnishments, and foreclosures. While the spouse who files for bankruptcy can find this to be incredibly beneficial, their spouse will face considerable impacts, as this can seriously delay the divorce process.
Generally, one of the most important ways in which the automatic stay will impact the non-filing spouse is by preventing the distribution of property. When someone declares bankruptcy, all of their assets will become a part of their bankruptcy estate. This means that the automatic stay prevents the distribution of these assets. This can not only impact the assets you receive, as if your spouse files Chapter 7, assets you are entitled to may be liquidated, but if your spouse files Chapter 13, this process can take three to five years to complete.
It’s also important to understand that, if your ex is ordered to pay temporary alimony or child support during this process, bankruptcy will not impact this. Your spouse will still have to pay, as family law payments are not protected under the automatic stay.
What Are My Options if My Spouse Files?
In the event your spouse files for bankruptcy during your divorce, the most important thing you can do is contact an experienced attorney to discuss your legal options.
If your spouse pursues Chapter 7, your attorney can help you fight to receive the portion of funds from the liquidated assets you are entitled to. Additionally, if your spouse files for Chapter 13, your attorney can file a motion with the court to lift the stay and continue the divorce process.
As you can see, bankruptcy can have a significant impact on your divorce. That is why working with an experienced attorney with Leslie Law Firm, LLC, is in your best interest. Our team understands that this can be a confusing and complex matter, which is why we will do everything in our power to help you fight for the best possible outcome for your circumstances. When you need help, our firm is here. Contact us today to learn how we can represent you.
