Divorce and Bankruptcy
Money problems and marital problems often go hand in hand. More than a fifth of divorcing couples in the United States cite financial problems as the greatest cause of their break-up. Arguments about fiscal matters are the greatest predictor of divorce — studies show that couples who argue over money once a week are 30 percent more likely to divorce than couples who only had financial arguments a few times per month. When money is tight, tensions rise and fights are inevitable.
If you've decided to divorce, money may or not be the biggest reason, but it's likely a factor or at least a concern. When two people are married, their finances are usually intertwined. Even if you, as an individual, have avoided debt, your spouse may have not, and there's a possibility that his or her creditors could go after you, even after a divorce. For many divorcing couples, filing for bankruptcy is an inevitability. However, for some of those couples, it can be a sort of relief.
Bankruptcy and Divorce Go Hand-in-Hand
Steiden Law Offices have experienced Cincinnati and Northern Kentucky bankruptcy attorneys who will represent you through the doubly difficult time of filing for bankruptcy, before or after filing for divorce. While we will not be able to represent you on the divorce itself, our knowledgeable attorneys can assist you discharge your and your soon-to-be ex-spouse's debts or in other bankruptcy matters. Call (855) 741-3328 or send an online message to set up a risk-free consultation.
We are proud to represent clients throughout Hamilton County and Southern Ohio, with two offices in Cincinnati. We can also serve Northern Kentucky, including Kenton and Boone Counties, with offices in both Florence and Covington.
Before or After Divorce?
If you've decided to divorce, you're likely dreading what might be a nightmarish legal proceeding, and you might not even want to think about adding another one with a bankruptcy filing. However, if you think you and your spouse have significant joint debt, or you face other concerns that make you worry about you or your spouse's ability to meet financial obligations after the marriage is dissolved, being pro-active about facing the problem may have more advantages than just getting it over with.
Both Ohio and Kentucky are "equitable distribution" states, meaning that, in a divorce, the court determines a fair share for each spouse of every asset — and every debt. If you've jointly taken on any debt, you could be financially responsible for at least a portion of that debt. Even worse, you may think you'll no longer be responsible for your ex-spouse's portion of your joint debt after the divorce, especially if you've signed a "hold harmless" clause. However, some creditors have successfully avoided those clauses and gone after the ex-spouse of the debtor.
By filing for bankruptcy before the divorce and discharging some of that debt, you'll have fewer issues to litigate in the divorce proceedings, and less debt to worry about in the future. A bankruptcy attorney might be able to represent both of you in one proceeding.
When You Can File Jointly
Married couples can file for bankruptcy jointly, meaning all their collective debts and assets are considered together. This means that you can handle those problems in one proceeding. Once again, having few issues to litigate in a divorce proceeding can be a big advantage for both parties. You can file jointly as long as you are still legally married, which means until the divorce is final. Even if you have already filed for divorce, you can still file jointly. In most situations, the bankruptcy matter will take precedence over the divorce matter, and the divorce will not proceed until the bankruptcy proceedings are complete.
Filing for bankruptcy jointly has other advantages. Under federal, Kentucky and Ohio law, people filing for bankruptcy have a list of items that can be exempt from being either liquidated under a Chapter 7 bankruptcy or considered among the assets under a Chapter 13 bankruptcy when the court is developing a payment plan. Married couples can "double up" their exemptions.
In Ohio, for example, you may exempt a homestead valued up to $21,635. A single person is only able to exempt his or her homestead and keep that asset up to that amount. However, a married couple can double that, exempting $43,270 worth of a homestead.
Perhaps you didn't foresee the kind of financial problems that you would have after going through a divorce. Your bank account has been emptied and you not only have your old financial obligations, but new ones that you are now going to have to tackle on your own. Looking at your income and assets, you know you're not going to be able to pay some of your bills.
Steiden Law Offices | Florence and Covington Bankruptcy Attorneys
You've entered a new stage in your life, and it's time for a fresh start. Filing for bankruptcy could be a way to shake off some of the weight holding you down. At the Steiden Law Offices, we are able to represent newly divorced clients and help them start over. Call (855) 741-3328 or send an online message to set up a risk-free consultation.