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Filing Bankruptcy After Divorce: A Financial Fresh Start

Going through a divorce can be extremely difficult both emotionally and financially. It often leaves people in a precarious financial situation, struggling to support themselves on a single income. However, filing for bankruptcy after your divorce can provide you with a financial fresh start and relieve you of burdensome debts.

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Filing for bankruptcy allows you to eliminate or restructure debts like credit cards, medical bills, personal loans, and certain taxes. This can help provide much-needed relief if you are overwhelmed with debt obligations. Here’s what you need to know about using bankruptcy as a financial reset after divorce.

Should You File Before, During or After Divorce?

One of the first things to consider is when you should file for bankruptcy in relation to your divorce timeline. There are pros and cons to filing before, during, or after your divorce is finalized:

  • Before divorce – Filing together before divorce allows you to deal with debts as a couple. But it requires cooperation and delays divorce.
  • During divorce – Can be complicated but allows each person to handle debts individually.
  • After divorce – Most common option. Allows a completely fresh start for each individual.

Filing after the divorce is usually the best option, as it allows both spouses to fully separate finances and get a fresh start [4]. However, there are cases where filing during or before divorce may make sense too. Talk to a bankruptcy lawyer to understand your options.

Filing Jointly vs Separately

If you do file before your divorce is finalized, you’ll need to decide whether to file jointly or separately. Here are some key considerations:

  • Joint filing – All assets and debts addressed together, requires cooperation
  • Separate filing – Assets and debts handled individually, less coordination needed

In many cases, separate filings may be better to allow each spouse to handle their finances independently [4]. But joint filings can also help deal with shared debts efficiently. Talk to an attorney.

The Benefits of Filing Bankruptcy After Divorce

Filing for bankruptcy after your divorce can offer many financial benefits:

  • Eliminates credit card, medical, and personal loan debts
  • Can discharge tax debts in some cases
  • Stops wage garnishment, lawsuits, and debt collection
  • Allows you to keep exempt assets like home, vehicle, retirement
  • Prevents creditors from pursuing you for discharged debts
  • Gives you a financial fresh start on your own

Bankruptcy can be a powerful tool to address many types of debt and get relief from creditor harassment. This allows you to get back on your feet after divorce.

Chapter 7 vs Chapter 13 Bankruptcy

If you decide to file bankruptcy, you’ll need to choose between Chapter 7 and Chapter 13:

  • Chapter 7 – Debts eliminated, except some taxes and mortgages. Fast process.
  • Chapter 13 – Debts restructured and repaid over 3-5 years. Keeps assets.

Chapter 7 is generally faster, while Chapter 13 allows you to keep assets like a house or car. An attorney can advise on the best chapter for your situation.

The Bankruptcy Process and Timeline

The bankruptcy process involves several steps:

  1. Filing bankruptcy petition and forms
  2. Attending 341 meeting and meeting with trustee
  3. Waiting period for creditors to file claims
  4. Discharge of qualifying debts
  5. Process complete except for payments in Chapter 13

The timeline can vary:

  • Chapter 7 – Typically 3-6 months until discharge
  • Chapter 13 – 3-5 year repayment plan

An attorney can provide a more exact timeline estimate based on your specific situation. The process provides permanent debt relief for most unsecured debts.

Costs of Filing Bankruptcy

The main costs of filing bankruptcy include:

  • Attorney fees – Average $1,200-$3,500+ depending on complexity
  • Filing fee – $338 for Chapter 7, $313 for Chapter 13
  • Debtor education course – Average $50-$100

While bankruptcy has costs, for many the debt relief and savings outweigh the fees. Costs can be paid over time in Chapter 13 cases.

Talk to a Bankruptcy Attorney

It’s important to speak with a qualified bankruptcy attorney when considering filing after divorce. An attorney can:

  • Analyze your financial situation
  • Explain your bankruptcy options
  • Recommend best chapter – 7 or 13
  • Provide timeline estimates
  • Help prepare and file paperwork
  • Represent you through the process

Navigating the bankruptcy process is complex. An experienced attorney makes it smoother.

The Fresh Start You Deserve

Going through a divorce and managing debts on a single income can be overwhelming. Filing for bankruptcy after your divorce finalizes can provide the financial fresh start you deserve.

Bankruptcy can eliminate credit cards, medical bills, personal loans, and other unsecured debt. This gives you a clean slate so you can move on with your new financial life after divorce.

Meet with a bankruptcy lawyer to discuss your options. With professional help, you can get the debt relief you need and start fresh.









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