Divorce & Bankruptcy
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Most people who declare bankruptcy usually do so because of a divorce due to irreconcilable differences such as issues brought about by child custody, adultery, and the like. Many people who have been through the process of getting divorced end up in a difficult financial position, which could be emotionally stressful. Financially, they may have trouble paying their bills with just one income, or it could be that their domestic support obligations, such as spousal support, make it difficult for them to pay their bills after divorce.
It is necessary to have legal advice about the possibility of filing for bankruptcy after a divorce procedure with the person who handled legal representation in your divorce case. It is of equal significance to consult with your bankruptcy lawyer regarding your pending divorce. Your bankruptcy case might be affected somehow by the terms of your divorce.
Call Miller & Miller Law, LLC in Milwaukee, Wisconsin, today for legal service regarding your concerns on divorce and bankruptcy. In our bankruptcy law office, we offer an initial free consultation. During that meeting, our bankruptcy lawyers will analyze your financial situation comprehensively, answer all your questions, and recommend the most effective strategy for resolving your debt.
Why Do I need a Bankruptcy Attorney in Milwaukee, WI?
The idea of handling divorce proceedings and filing for bankruptcy at once may seem overwhelming, but nearly all divorcing couples choose this course of action because it is more favorable for both parties involved. The laws governing community property in Wisconsin are very stringent. Your divorce lawyer in Milwaukee will assist you in determining which of the assets and properties that you and your spouse own ought to be categorized as community property.
Additionally, they will assist you in determining which of those assets and properties ought to be categorized as separate property or which is solely yours to the division of property issues. A married couple’s debts are considered part of the community property under the law that governs community property.
In a perfect world, having both partners file for bankruptcy together would result in a discharge of all or some of the couple’s debts. During the proceedings regarding their property division, this means they will have fewer obligations to manage. If you hire an experienced Milwaukee bankruptcy attorney, they will be able to file for divorce on your behalf. They will coordinate their efforts with those of the lawyer representing your spouse in the divorce proceeding. Your divorce will take longer to finalize overall resulting from these proceedings.
However, the divorce proceedings will move more quickly because there will be fewer financial issues to resolve. This is a complicated and involved process that absolutely must be handled with the assistance of a dependable bankruptcy attorney in Milwaukee with experience in these cases.
What is a Chapter 7 Bankruptcy?
Chapter 7 bankruptcy, also known as straight liquidation bankruptcy, is the most prevalent type. It allows you to be released from liability for all or nearly all of your obligations on the date you file for bankruptcy. You are no longer required to make payments on discharged debts, and your creditor is prohibited from attempting to collect them. Certain debts cannot be discharged, including criminal fines, alimony, and child support. Other debts, including taxes, student loans, and debts incurred due to fraud on your part, may not be dischargeable depending on the circumstances. You may be eligible for a tax discharge if you have filed a tax return and specific periods have passed. The rules for tax discharge are complex; if you have tax debts, you should consult a lawyer before filing for bankruptcy. Once every eight years, you may receive a discharge in a Chapter 7 bankruptcy.
What is a Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a proposal to the federal court to repay a portion or all of your outstanding obligations to a creditor. In most instances, it is usually the latter. In Chapter 13 bankruptcy, a court-approved payment plan of 36 to 60 months is proposed to repay your arrears. If your gross income is below the state’s median income, the court will propose a 36-month payment plan. If your gross income is greater than the state’s median income, the court will propose a 60-month payment plan.
Your Chapter 13 bankruptcy plan will propose a repayment amount to your creditors and its duration. The proposed repayment amount to creditors can range from 0% to 100%. Once a bankruptcy petition is filed, the first plan payment is due thirty days later. The bankruptcy trustee will distribute payments to creditors.
How do bankruptcy and divorce influence one another?
Filing a bankruptcy petition does not halt divorce, custody, or support proceedings. However, it may delay the distribution of assets until the case has been resolved.
Most people will choose to file for bankruptcy under Chapter 7 if they have the option. It is efficient, as it can be finished in as little as three to four months, and it wipes out eligible debts without requiring a repayment strategy. In addition, you will be able to “exempt” the property required for your work and living. This means that you can keep it. The most significant impact a bankruptcy proceeding can have on a divorce is postponing the process of dividing the assets.
The bankruptcy trustee appointed to administer your case will sell any non-exempt property and hold most of your assets in the bankruptcy estate while the case is being administered. The trustee will then divide up any funds that are left over and give them to the debtor’s creditors.
The process outlined in Chapter 13 is unique: if you and your partner decide to file for Chapter 13 bankruptcy, you will each be responsible for the repayment plan that lasts between three and five years.
Call our Bankruptcy Lawyers Now!
Courtroom hearings that follow cases involving family law and bankruptcy tend to be contentious and fraught with emotion, as the issues that can arise in these tend to be numerous and complex. It is in your best interest to get yourself ready in advance by familiarizing yourself with common family law issues and by consulting with lawyers who are knowledgeable in both of these areas.
Need a lawyer? Our law office will be glad to assist you regarding your divorce process.
Discuss your options with a bankruptcy attorney in Milwaukee at Miller & Miller Law, LLC, who has extensive experience in divorce laws. As a client, lawyer consultations are always kept confidential. Call our law firm today for an initial free case evaluation.