The Crossroads of Family Law And Bankruptcy
September 21, 2016


At the Crossroads of Family Law and Bankruptcy Lays Complexity

Crossroads of Family Law and Bankruptcy
Due to the complexity of the intersection of family law and bankruptcy, having the right information and an experienced attorney makes all the difference.

The thought of separation or divorce can be both difficult and frightening. What will happen to the house? Who will be responsible for paying the bills? How will I pay my credit card bills and other debts? Can I afford to separate from my spouse and live on my own? These and other questions can sometimes lead you to the realization that you are standing at the legal intersection of family law and bankruptcy law.

Although the crossroads of these two legal disciplines can be confusing, it is important to know that it is not uncommon for a divorce to lead to bankruptcy for one or both spouses. This is because the parties have often accumulated debt based upon a formula that includes one set of monthly expenses and two sources of income. When a divorce or separation occurs, that one set of monthly expenses with two sources of income formula is replaced with two sets of monthly expenses, each with only one source of income. In this scenario, it is easy to see how the credit card bills and other non-essential debt get ignored.  Unpaid credit card bills and other non-essential debt are the most common reason that people file for bankruptcy.   The obvious question then is:  “What do I do now?”

Important Considerations in Bankruptcy when Divorcing

Some important initial considerations include:

(1) Should I consider filing for bankruptcy?

(2) What are the differences between Chapter 7 and Chapter 13?

(3) Do I qualify for chapter 7 or, is chapter 13 a better fit for me?

(4) If I decide to file for bankruptcy, should I do it before, during, or after I have begun the divorce process?

(5) How will the timing of my bankruptcy petition impact my divorce proceeding?

(6) Should I file a bankruptcy proceeding by myself or, should I file jointly with my spouse before we separate or complete our divorce?

(7) How will a bankruptcy proceeding impact property settlement agreements in my divorce?

These and other very important questions must be considered fully before any decisions are made when you find yourself standing, often through no fault of your own, at the legal intersection of family law and bankruptcy law.

Retain the Right Attorney

If you are one of the millions of people who find themselves in this position, beware: the intersection of these two disciplines can be confusing and fraught with peril. It is therefore critical for you to retain an attorney who is proficient in both family law and bankruptcy law.  The combined effect of a skillfully managed divorce and bankruptcy proceeding is extremely powerful and can provide you with a fresh start in life, both personally and financially.  This is often the goal for anyone considering a separation or divorce.

If you are interested in learning more about this topic, or if you need to consult with an attorney regarding divorce and/or bankruptcy, please contact Melissa L. Van Eck, Esquire at Daley Zucker Meilton & Miner, LLC 635 N. 12th Street, Suite 101, Lemoyne, Pennsylvania 17043 or by telephone (717) 724-9821.  Our firm will be hosting a seminar to discuss the interplay between bankruptcy and divorce on September 27, 2016 at 5:30 p.m. Call today to reserve your seat!