On behalf of Stange Law Firm, PC posted in divorce on Sunday, December 3, 2017.
Residents in Missouri who are facing the difficult and emotional decision of having to end their marriage may also have other decisions to wrestle with. If financial problems are part of the marital issues, people may also be struggling with how to reconcile these problems as well. If the financial challenges are severe enough and bankruptcy is a viable options, consideration should be given as to what type of bankruptcy might be best and when it would be most appropriate to file for that bankruptcy relative to when a divorce filing is made.
As explained by The Balance, if a person or a couple feels that a Chapter 7 bankruptcy is appropriate for them, they may want to consider doing this jointly before they initiate their divorce proceeding. This will allow them to benefit from higher exemption rates which may result in them being able to keep some assets that they may otherwise lose if one spouse filed a solo Chapter 7 bankruptcy regardless of the timing of that filing.
If a home is one of the assets potentially at risk of being lost in a bankruptcy, Chapter 13 plans may offer alternatives to spouses who want to retain their family homes. However, because this type of plan lasts up to five years, it may be best to complete the divorce first before looking at the bankruptcy.
Bankrate does caution spouses and homeowners about the potential pitfalls of retaining a family home after a divorce. Regardless of what a divorce decree or even a quit claim deed says, if the mortgage is in both people’s names, that debt remains joint.
