“When it rains, it pours” goes the old cliché. This may no doubt seem true for Wisconsin residents not only on the verge of divorce but also struggling with debt. Fortunately, however, help for both problems may come from an unlikely source. Believe it or not, filing for Chapter 7 bankruptcy can actually make both problems — divorce and debt — easier to solve.
For most people, the words “divorce” and “bankruptcy” in the same sentence would seem to describe little more than a disaster. Nonetheless, a bankruptcy filing has merit when it comes to divorce. First, filing for bankruptcy before divorce proceedings can help make the process easier, particularly when it comes to issues of property division. Because divorcing couples are obligated to share any debt burden during divorce, debts properly disposed of through bankruptcy no longer weigh down deliberations and a divorcing couple can focus on more pressing issues such as child custody.
Second, bankruptcy can help divorce when the divorcing couple agrees to file jointly for bankruptcy. This lessens the costs of the divorce process.
Of course, simultaneously undergoing two life-changing events at once can be profoundly distressing, but with the right help, both parties can get through both processes and come out better off financially and maybe a little wiser.
Wisconsin divorcing couples and even residents undergoing financial troubles should bear this in mind. To the uninformed, filing for bankruptcy usually means failure; in reality, it is finding a way to make a fresh start.
Filing for bankruptcy can help eliminate debt in a legal and reasonable way and remove the fear of creditor harassment and the possibility of losing homes, car and other possessions. Consulting a bankruptcy law specialist can help shed light on bankruptcy questions such as qualifications, asset liquidation and possible payment plans.
Source: Lansing State Journal, “Divorce, bankruptcy sometimes go hand-in-hand,” Gene Turnwald, Sep. 27, 2013