Some North Carolina families going through divorce also face the decision concerning bankruptcy and whether both spouses should file or just one. The type of debt you’re trying to dispose of will help determine which option is best.
Determining marital debt
Divorces are contentious for many reasons, especially finances. One spouse might owe less debt but be held responsible for half of the marriage debt. Understanding which debts are personal or marital can help ease some tensions. Housing payments, attorney fees and court costs incurred after legal separation can be classified as personal debt; however, if joint credit cards were used to pay those costs, they can be classified as marital debt.
What to expect when filing bankruptcy individually while separated pending divorce
Bankruptcy law permits you to file bankruptcy separately without your divorcing spouse, but be prepared to have the court closely examine your finances. The bankruptcy court will be looking closely to see if you’re avoiding paying your share of marital debts, creating more debt for your future ex-spouse or not disclosing any marital assets that can pay off all or part of your creditors. It’s not uncommon for a spouse not to reveal some assets, but if hidden assets are discovered during the divorce, it could result in severe consequences when filing bankruptcy.
Consider settling your divorce when filing bankruptcy
Divorce is often expensive, frustrating and time-consuming. Including bankruptcy into the mix adds an increased financial burden. Bankruptcies costs include legal fees and court costs, resulting in more time and money being exhausted. If both spouses can agree to settle, it could reduce further marital strain.
Bankruptcy law is challenging, and things can get frustrating when splitting debts and assets. Patiently figuring out how you should file bankruptcy will help you make the best decision.