Simultaneous lawsuits: aspect of filing divorce and bankruptcy together

Simultaneous lawsuits: aspect of filing divorce and bankruptcy together

USA is not immune to the recession related effects plaguing its own society like many other nations around the world. Recession is even delaying the decision to divorce. This is because many couples have gone bankrupt and currently they are having fund shortages.

There are several situations however, where one of the spouses has filed for bankruptcy to protect the property. During divorce the question of alimony and child support related issues arises. This is when the budget becomes strained as it becomes heavy on the pocket to run two families simultaneously.

Andrew Cherlin (sociologist) of Johns Hopkins University made a correlation between Great Depression of 1929 and recent recession with the divorce rate. In USA divorce is now a luxury for rich and famous. In an interview given by divorce attorney David Goldberg to Washington post, he himself stated many of his clients have abstained from divorce due to financial reasons.

A spouse must keep in mind that spousal support related payments don't come under dischargeable debts. Property related settlement is another important area which would affect a couple undergoing divorce and bankruptcy simultaneously. In simple words the following bankruptcy and divorce related debts aren't discharged:-

Alimony and child support related matter;

Some obligations for property settlement may be the result of prenuptial agreement;

Student loans;

Debts that pertains to any criminal activity;

Restitution based on criminal activity, etc.

The best course of action would be to label as much debt as support money. In this manner you can secure your support payment after filing bankruptcy. Before the bankruptcy court first rules which assets are exempt from bankruptcy estate .This is done before the divorce court can give its rulings on the division of assets.

It is cost effective to file both the bankruptcy and divorce lawsuit together. The lawyer fee is reduced along with other expenditures. It can simplify the process and solve the remaining debt during the ongoing divorce litigation.

Couples facing both divorce and financial problems can go through several emotional phases- hostility, frustration, bitterness, denial, etc. The couple has to take the decision of which lawsuit to file first. The decision can be together or individual. State law will also determine the decision. For example in the state of California, declaration of bankruptcy by one spouse will make all debtors property and community property under bankruptcy estate. It is better to consult these aspects with a Baltimore Bankruptcy Attorney, if you are a resident in and around Baltimore city.

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