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Bankruptcy and Divorce
Conquering both bankruptcy and divorce in a close time span can be challenging for anyone. The emotional strain can be hard on any party involved. However, some pre bankruptcy planning may make the process a little less painless and likely a lot cheaper all around.
One important consideration if you are in need of both a bankruptcy and a divorce is whether to file the bankruptcy before or after the divorce. The answer is it depends. Of the many things to consider some of the most important include:
An additional benefit of filing the bankruptcy prior to the divorce is that the joint bankruptcy is then one set of attorney’s fees and one set of court costs whereas if you divorce first then you would each have to file your own individual bankruptcy with its own set of attorney’s fees, court costs, paperwork, etc.
How to Protect Yourself if You Think Your Future Ex-Spouse Will File for Bankruptcy
Does your spouse have a lot of debt that is in his or her own name? Do you think they may file bankruptcy after the divorce? You will want to keep this in mind while determining the terms of the divorce. While domestic support obligations such as child support, alimony, etc. are not dischargeable in any type of bankruptcy, property settlements are dischargeable in a Chapter 13 bankruptcy. Is your spouse “offering” to take on the house debt and in exchange will buy you out and give you ½ of the equity? If he agrees to that in a divorce decree/separation agreement and then files bankruptcy, then his so generous offer of owing you ½ of the equity was just discharged meaning you cannot sue him or require him to pay you. Keep this in mind. Instead of him owing ½ of the equity so that you can afford normal every day expenses, maybe you need support/maintenance also known as alimony but most importantly known as a domestic support obligation which is not dischargeable in any time of bankruptcy.
DSO’s (domestic support obligations) should be distinguished from property settlements as one is dischargeable in certain types of bankruptcy and not dischargeable in other types of bankruptcy while the other is not dischargeable in any type of bankruptcy. A Domestic support obligation is any debt incurred before or after a bankruptcy filing that is owed to or recoverable by a spouse, child or governmental unit; in the nature of alimony, maintenance or support’ established pursuant to the terms of a divorce decree, separation agreement, property settlement agreement, court order or administrative determination. This is not dischargeable in any type of bankruptcy. Property settlements however are an obligation to a spouse, former spouse, or child of the debtor that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other court order, or a determination made under state or territorial law by a governmental authority is non-dischargeable in a Chapter 7 but is dischargeable in a Chapter 13. Attorney’s fees incurred in a child support or custody matter, guardian ad litem fees, and court services fees have all been held to be Domestic Support Obligations and therefore are not dischargeable in a Chapter 7 or Chapter 13 bankruptcy.
St. Charles Office
1861 Sherman Drive
St Charles, MO 63303
Phone: 636-916-5400
At Hwy 94 and Hwy 70.
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St. Louis Office
3470 Hampton Ave, Suite 101
St. Louis, MO 63109
Phone: 314-353-0834
Close to the corner of Hampton Ave and Chippewa. By appointment only.
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South & Jefferson County office
7321 S. Lindbergh Ave., Suite 222
St. Louis, MO 63125
Phone: 636-916-5400
Across the South County Mall.
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Florissant Office (North County)
1281 Graham Rd, Suite 300
Florissant, MO 63031
Phone: 314-921-1880
At North Hanley and Hwy 270.
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Belleville Office (St. Clair county)
2 Park Place Professional Centre
Belleville, Illinois 62226
Phone: 618-977-9560
On Hwy 159, next to Schnucks.
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Granite City Office (Madison County)
3600 Nameoki Rd, Suite 201
Granite City, IL 62040
Phone: 618-977-9560
Across Shop'n Save, by appointment only.
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