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Are you buried in debt? Are you constantly being harassed by creditors? Have you received a notice of foreclosure?

Filing for bankruptcy can help you put an end to all of these problems. At Jeff Field & Associates, our lawyers...


Bankruptcy Blog Post

What Comes First? Bankruptcy? Divorce?

The U.S. Census recently reported that Georgia outpaces the nation in the rate of unemployment: 8.7 compared with 7.3. It appears that Georgia also has the eighth-highest divorce rate in the nation. While many variables such as the age of persons when they marry may come into play and affect the rate of divorce, few issues put more strain on a marriage than the unemployment of one or both spouses.  Many couples may find themselves in a "blame game" as to who was responsible for incurring the debt; who failed to pay the debt; or who let the debt get out of control. Under financial strain, some such marriages may end in a separation or divorce. 

Years ago, when I practiced law in Orlando and in Tampa, FL, that law firm handled bankruptcy cases as well as contested and uncontested domestic relations (divorce) cases. Many of our clients elected to proceed using both bankruptcy and divorce in order to blend the best features of both disciplines in controlling the debt and in dissolving the marriage.  Not surprisingly, in several of those cases, although the initial strategy was to file a joint bankruptcy case and then proceed with a divorce, after the financial woes were brought under control by the bankruptcy filing, several couples decided to reconcile and did not file for divorce.

The impetus for filing a bankruptcy case before finalizing a divorce is that prior to a dissolution of the marriage, a married couple is eligible to file a joint bankruptcy case even if they are "living separately and apart". A joint bankruptcy case has been referred to as a "2-fer" as in "two for one". This is because the married couple only has to pay one attorney's fee, one filing fee and one fee for credit counseling and the debtor education course. In times of financial stress, this can be viewed as a "huge" benefit to married couples conferred on married couples by the Bankruptcy Code.

Of course, if a joint case is contemplated, at a minimum, a bankruptcy attorney will seek assurance that the couple will be available to jointly meet with him/her and to cooperate with each other and with the bankruptcy attorney in scheduling their assets and scheduling their debts and be available for any necessary hearings in a joint effort to leave themselves in a position to know which assets are being retained and, what debt, if any, each will be responsible for going forward after the Discharge and in the event they elect to file for divorce.

In the event the couple is unwilling or unable to cooperate and meet together with a bankruptcy attorney (for example, a Restraining Order has been issued against one spouse or the issues involved in any divorce would be vigorously contested by the parties), it is unlikely that any attorney would file a joint bankruptcy case and take on the representation of a couple whose interests are or may be antagonistic toward one another. In such a scenario, bankruptcy may still be a valid option for either or both spouses; however, the filing would be as an individual and not joint. In such a case, many bankruptcy attorneys would prefer to deal with an Order finalizing the divorce and setting out the  terms of your divorce and reflecting your assets and any liability going forward. 

In the event you are in a pending divorce when you consult with a bankruptcy attorney, when you make an appointment with a bankruptcy attorney, you will be asked to bring in a copy of the complaint and any Temporary Order issued in the divorce case. 

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