Divorce and the Automatic Stay, Frequently Asked Questions

Considering divorce when filing for bankruptcy is no easy task. Chances are you will have a considerable amount of decisions to make when determining the best way to move forward. If you are still married but you and your ex have decided to file for divorce, you may be wondering when the most appropriate time to file for bankruptcy actually is. Lawyers know that you will have many questions pertaining to filing for divorce and bankruptcy, in addition to how the automatic stay may provide you with relief from collection efforts. Consulting with a trusted and experienced lawyer can help you obtain the answers to the many questions you have and help you make key decisions for moving forward. Frequently Asked Questions: Bankruptcy, Divorce and the Automatic Stay

What is an automatic stay?
The automatic stay provides people filing for bankruptcy with relief from creditors attempts to collect their debts. This can come with much relief for someone who has been pestered by collection agencies. Additionally, during the automatic stay you may even be protected from eviction or foreclosure. One other significant benefit is that the automatic stay can prevent some forms of wage garnishment.

What debts are considered exempt from the automatic stay?
It’s important to know that some debts are exempt from the automatic stay once it has been granted. Often, these debts are not able to be discharged during bankruptcy proceedings. This means that you will still be required to pay them. The following are common debts that are considered nondischargeable: 

• Alimony
• Child Support
• Pension Loans
• Fines or Restitution for a Criminal Conviction

Will the automatic stay prolong the resolution of my divorce?
In some cases yes. While you can still pursue your divorce, once the automatic stay has been granted it will put a stop to settlements that are made during divorce proceedings. While it’s essential to speak with a lawyer regarding your specific situation, in some cases it may be advantageous to file for bankruptcy before initiating your divorce. 

Will my soon-to-be ex and I need to file for bankruptcy together?
Reaching this decision will require careful consideration. While you and your soon to be ex can certainly file jointly, you can also file separately of one another. In some cases, it may be beneficial to file for bankruptcy with your spouse prior to filing for divorce. This will give you the ability to pool your assets and wipe out any dischargeable debts jointly. 

Should I wait until after my divorce to file for bankruptcy?
While it’s essential to speak with a lawyer regarding your specific situation, in some cases it may be advantageous to file for bankruptcy prior to filing for divorce if you are considering filing for Chapter 7. This can ensure that all is settled before you and your spouse move forward with divorce proceedings. However, if you are considering filing for Chapter 13, bear in mind that the process can take 3-5 years to resolve meaning, you may want to wait.   

Frequently Asked Questions: Bankruptcy, Divorce and the Automatic Stay

When bankruptcy and divorce are intertwined, the process can bring forth a number of emotions. You may be experiencing feelings of loss, fear, anxiety and confusion. Divorce will change the life you once knew while bankruptcy, once resolved, can provide you with relief. You don’t have to endure this process alone, contact a bankruptcy lawyer in Melbourne, FL for help.

Thanks to the Law Offices of Arcadier, Biggie & Wood for their insight into bankruptcy law and automatic stays.  Frequently Asked Questions: Bankruptcy, Divorce and the Automatic Stay.