How a Divorce Can Impact Your Bankruptcy

If you’ve filed for bankruptcy, it’s not unlikely that tensions are running high at home. Relationship issues often come hand in hand with financial issues, and money trouble can really pull at any of the pre-existing little cracks in your marriage. Money is not only one of the biggest things couples argue about — it’s also one of the most commonly cited reasons for divorce.

But what happens if you’ve already filed for a Chapter 13 bankruptcy and you have to file for divorce during the process?

The process of Chapter 13 bankruptcy involves taking stock of your finances and creating a budget. Obviously, a divorce is a huge change for your household income and expenses. In short, things are going to become a bit more complicated.

Can I keep my bankruptcy lawyer, or is that a conflict of interest?

If you’re filing bankruptcy jointly with your spouse, and the divorce means that your best interests are going to be different now, it may mean that your bankruptcy lawyer has to withdraw and you each have to hire your own new bankruptcy lawyer who represents you alone. However, if you were filing for bankruptcy independently of your spouse, it shouldn’t be necessary for you to change lawyers.

If my spouse and I get separate lawyers, do we still file bankruptcy together?

No. Your joint case will need to become two independent cases. Changing the preexisting filing requires filing a motion with the court.

Divorce sometimes requires dividing property, but I’m not supposed to transfer property during my bankruptcy. Help!

In these cases, you would have to request court permission to divide property as necessary in the divorce proceedings.

Is the plan I made still completable?

You may or may not still be able to complete your original plan. There are lots of factors that impact who will be responsible for paying what. Who’s name is each debt in? Will your payments still be enough to pay back your debt? Your bankruptcy attorney can help you navigate all of this confusion and in most cases you can still have a successful bankruptcy despite your divorce.

Where can I find an experienced bankruptcy attorney in California?

If you are facing major financial difficulties and need help, contact Hedtke Law Group. We are eager to help you during these frustrating times by ensuring that you understand your legal rights and have all the information you need to make sound decisions regarding your finances. Don’t delay! Give us a call at (909) 579-2233.

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