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.
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.
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.
FREE CONSULTATION WITH ARIZONA’S BEST BANKRUPTCY ATTORNEYS
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.
FREE CONSULTATION
HOW CAN WE HELP?
If your divorce decree includes an indemnification clause, it gives a spouse not ordered to pay a community property debt recourse should they ever be pursued by the creditor. Here’s an example- your spouse got to keep a community property vehicle in your divorce, but in exchange, was ordered to pay off a larger share of your community property debts. Before paying off those debts, your (ex) spouse files bankruptcy, discharging their legal obligation to pay the debt. The creditor will then come to you to pay the debt. If your divorce decree includes an indemnification clause, you can pursue your former spouse to reimburse you for the debts that they were supposed to pay.
Bankruptcy Timeline After a Divorce
How Long After Divorce Do I Have to Wait to File Bankruptcy? Am I Even Allowed?
Either or both spouses can file bankruptcy after their divorce if they so please. There is no official time period you must wait out before filing your bankruptcy after divorce. There just may be reasons that it could be advantageous to delay your bankruptcy petition filing. Make sure you review your situation with an experienced bankruptcy attorney before making any final decisions.
Should I File My Bankruptcy Before My Divorce is Finalized?
It is almost a hard and fast rule that you should wait until your divorce is finalized before filing your bankruptcy petition. A bankruptcy petition filing triggers the automatic stay. This is a protection meant to stop your creditors from seizing your assets, but it will also freeze your assets in a way that makes it impossible to proceed with a divorce. The delay this will cause will depend on where you are in your divorce case and which chapter of bankruptcy you file. A Chapter 7 bankruptcy could hold up your divorce for up to 6 months or longer. A Chapter 13 bankruptcy is infeasible during a divorce and lasts 3 or 5 years.
CHAPTER 7 BANKRUPTCY
WHAT YOU NEED TO KNOW ABOUT BANKRUPTCY IN CHANDLER AND GILBERT
Individuals and businesses with overwhelming debt in the East Valley of Phoenix often seek relief through filing bankruptcy. Ch 7 BK is also the most chosen chapter of bankruptcy for couples that are seeking a divorce. Chapter 7 eliminates most (if not all) debts accumulated throughout the marriage. Once the marital debts are eliminated, often, the divorce process flows a lot better.
Whether you are married or single, if you are considering Chapter 7 bankruptcy, it is advised that you contact our Chandler BK Lawyers for a free debt evaluation. Because, in order to file Ch 7 bankruptcy in Maricopa County, Arizona, a single person or married couple must meet eligibility requirements. Additionally, if this debt relief option is right for your specific debt situation, our experienced legal team provides the representation necessary for a successful resolution to your bankruptcy case.
A FRESH FINANCIAL START
Eliminating Debt Through Chapter 7 Bankruptcy
Chapter 7 eliminates both debts. CH 7 is referred to as a straight bankruptcy. Furthermore, it is a straightforward process that allows a debtor, or a married couple, to discharge, or erase, most debts. Therefore, retaining a fresh start and a clean financial slate is paramount when settling a divorce. When seeking legal help for bankruptcy and divorce, do not hesitate to call our Phoenix bankruptcy lawyers and Phoenix divorce lawyers for assistance.
Eliminating these debts by filing Ch 7 BK, individuals and married couples eliminate the stress of late payments, wage garnishments, potential repossession or foreclosure, and lawsuits stemming from debt. Declaring bankruptcy in Chandler clears the way for a “Fresh Start”.