CHANDLER’S BEST BANKRUPTCY LAWYERS

Experienced Chandler Bankruptcy ATTORNEYS

Filing Bankruptcy After a Divorce in Phoenix, Arizona

No one goes into a marriage planning to eventually divorce, and no one enters a financial venture with the hopes of declaring bankruptcy. Unfortunately, sometimes life has other plans for us. Whether debts caused your divorce, or are causing financial strain after your divorce, bankruptcy might be able to help. But a recent bankruptcy is one of the infinite possible factors that could make your case more complicated. You deserve precise, skillful legal representation that will ensure your financial interests both during and after your bankruptcy. For your free consultation with a member of our dedicated, skillful bankruptcy team, click here or call 480-833-8000.

CONTACT ARIZONA’S BEST BANKRUPTCY ATTORNEYS

FILING BANKRUPTCY AFTER A DIVORCE

LOCAL BANKRUPTCY ATTORNEY NEAR YOU

What Causes People to File Bankruptcy After a Divorce?

Debt and divorce can be a chicken and egg type of situation. Did the spouses divorce because they fought about debt, or are they in debt because of financial struggles brought on by the divorce? It’s quite possible that both are true. Many people file bankruptcy after divorce due to debts they incurred both before and during the marriage. In Arizona, debts incurred before the marriage are separate property and debts incurred during the marriage are community property. Either spouse can be held liable for community property debts, regardless of what a divorce order says or whose name the debt is in. If you are considering bankruptcy due to pre-divorce debt, you should review it carefully with a bankruptcy attorney to determine any impact your divorce decree could have in your case.

Financial Issues That Arise With Divorce

Another reason people need to file bankruptcy after divorce is because they simply can’t afford their post-divorce bills and lifestyle. Perhaps they used to be part of a dual-income household, and now must adjust to life as a single earner. Or maybe they were the primary breadwinner for the family, and now must pay spousal maintenance and child support after the divorce. Divorce also comes with significant expenses, such as attorney’s fees and other legal costs.

In the end, you shouldn’t feel bad about yourself for struggling financially after a divorce- it’s more common than you might think. Divorce is one of the leading causes of bankruptcy, with medical debt being number one. Bankruptcy could greatly improve your financial situation after a divorce, allowing you to focus on improving other areas of your life.

Reliable Bankruptcy Representation for After a Divorce or Whatever Life Throws Your Way

At My AZ Lawyers, PLLC, we understand that sometimes debt arises from circumstances that are outside of our control. We will make sure that your bankruptcy case receives the special care and attention that it deserves. This will help pave the path to a brighter financial future for you. We offer competitive rates and payment plans starting at $0 down for qualified clients.

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CONTACT ARIZONA’S BEST BANKRUPTCY ATTORNEYS

QUALIFYING FOR BANKRUPTCY

BANKRUPTCY AFTER DIVORCE ATTORNEY IN CHANDLER, ARIZONA

Bankruptcy Income Qualification After a Divorce

A huge factor in many people’s decision on whether to file bankruptcy is if they will qualify for Chapter 7 bankruptcy or need to file Chapter 13 bankruptcy instead. While Chapter 13 bankruptcy provides several benefits, many people prefer Chapter 7 bankruptcy because it wipes away debts rather than reorganizing them into a payment plan. However, Chapter 7 bankruptcy comes with strict income limitations that prevent many married couples from qualifying.

To determine your bankruptcy income qualification, you will need to use your average household income over the past 6 months. Notice that is household income, not just your individual income- if your spouse is employed, their income must be included as well. That means that you may have an easier time qualifying for Chapter 7 bankruptcy after you are divorced, and your spouse’s income is no longer part of your household income. Depending on how close you are to the borderline, you may need to wait a few months after divorce to file bankruptcy to make sure your average household income has decreased.

Chapter 7 Bankruptcy and Divorce

There are two ways to use your income to qualify for a Chapter 7 bankruptcy in Phoenix. The simplest way is by finding your average household monthly income and seeing how it compares to Arizona’s median for your family size. This starts at $4,871.83 per month for an individual, $6,105.17 for a family of 2, $6,592.50 for a family of 3, and continues to increase for additional family members. If you still don’t qualify for Chapter 7 bankruptcy using this method after divorce, you will need to use the means test. This test is complex as it is, and will be even more complex if your expenses have been shifting due to the divorce. We recommend conducting the means test with the guidance of an experienced bankruptcy attorney.

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CHANDLER, ARIZONA EXPERIENCED BANKRUPTCY LAW FIRM

Carefully Review Your Divorce Decree

When your divorce is finalized, the judge will send out orders that explain the resolution of all the divorce issues, including property division, spousal maintenance, and child custody. It is vital that you fully understand the property division terms of your divorce decree before filing a post-divorce bankruptcy.

All debt acquired by either spouse during the marriage is community property, and either spouse can be pursued for its repayment. Debt collectors don’t have to follow the terms of your divorce orders. That means that if your spouse is ordered to pay a community property debt in the divorce, but doesn’t, the creditor can eventually come after you. You will be left without recourse unless your divorce decree includes an indemnification clause.

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