Whether coming before a marriage begins or after a divorce, bankruptcy is all too often connected to matrimony in some way. Jacksonville, with 13% of it’s population having been divorced at least once and over 11,000 bankruptcy filings a year, there’s no surprise the two are connected.
Many couples fail to consider how bankruptcy can be effected by their co-habitation. Because qualifying for a Chapter 7 bankruptcy often requires that the couple’s combined income is less than the median income for their family size and people often marry prior to filing bankruptcy, making the an already stressful process more trying.
The first thing I do when a couple enters my office is establish if in fact both need to file. Sometimes all of the debts are in one person’s name allowing us to file one spouse and protect the other’s credit. Other times it’s more advantageous to file both jointly, taking advantage of the “two for one” filing fee and credit counseling costs. There is even the possibility that one spouse take advantage of the “clean slate” benefits of a Chapter 7 bankruptcy, while the other avails themselves of the potential reduced interest rates and principle balance reductions in a Chapter 13.
After a marriage has ended financial problems typically follow. Generally, couples divorcing have a home mortgage in both their names. When this happens they may attempt to keep the property, but often can’t get proper financing. This often leads to a “Short Sale”, however even a successful short sale is not a solution to the problem as they are still held liable for the deficiency on the note. Without strong financial backing, bankruptcy is one of the only solutions to this problem.
There are many ways in which a bankruptcy might be in your financial best interest. I work daily with Kelly Ryan Lee, co-author of the Divorce Attorney Blog here at Law Office of David M. Goldman PLLC. If you are considering bankruptcy and a divorce, we know the inner-workings of both and how they interrelate. Call us today at 904-685-1200 to schedule a free consultation.