A divorce is emotionally draining even if it was decided by both spouses. And while spouses can agree on many issues on their divorce, they may argue over certain things especially when it comes to debt division. Depending on the debt amount, a spouse may consider filing for bankruptcy during their divorce. In this case, it is imperative to consult a skilled divorce attorney in Madison, MS to get guidance on this matter and know the impact of the filing on the divorce proceedings.
How Debt Division Works During Divorce
Often, debts and property remain with the spouse who brought them into the marriage. But, the court may divide the assets merged into the marriage. Mississippi courts divide marital assets by following the equitable distribution doctrine. Sometimes, the division may not be done equally. Thus, if a couple jointly incurred debt while they were married, this debt will be divided between both parties but may not be equal. A judge will take into account a lot of factors when they divide marital debt.
During a divorce, a bankruptcy filing can stop the divorce proceedings until bankruptcy proceedings are finalized. With this halt, the assets of the couple will be temporarily suspended, so the bankruptcy court can identify the extent of the debt and the marital assets that can be used by the couple to satisfy these payments.
If you or your spouse is thinking about filing for bankruptcy, you must consider whether to file before or after the divorce. Your divorce agreement must include a clause to protect you if your spouse later claims bankruptcy. Also, the agreement must note that any bankruptcy filing made by a spouse will not discharge child support or spousal support payments.
When Bankruptcy May be Advisable During a Divorce?
A bankruptcy filing may be beneficial if the marital property of the divorcing couples would be included in these proceedings. The reason is that the asses that the court would divide would be minimal. An experienced divorce attorney will usually work with your bankruptcy lawyer to determine what’s best in your case. Meanwhile, while a division of property in a divorce cannot be modified, you can request for a modification if your spouse lied about bankruptcy during your divorce and you only discover it later.
Sometimes, an individual bankruptcy filing will be beneficial if one of the spouses does not qualify for bankruptcy. In such cases, both spouses can terminate a substantial part of the debt before their divorce and divide the remaining debt during their divorce.