Divorce and bankruptcy can both bring significant changes to your finances. When someone has to manage financial struggles and the end of their marriage at the same time, the decisions they make during this stressful time can be even more important. What should residents of Essex County and the rest of New Jersey know about bankruptcy and divorce?
When financial struggles and family law collide
When one or both spouses file for bankruptcy in New Jersey during or after a divorce, several legal and financial considerations come into play.
In a divorce, dividing the couple’s assets between the spouses can be one of the most complex issues to resolve. When bankruptcy is involved, this already contentious process can become even more challenging. The automatic stay that halts collections could pause the process of dividing the couple’s property until after the courts finalize the bankruptcy.
Bankruptcy does not discharge obligations like spousal or child support, and people must still pay these debts despite bankruptcy proceedings. However, the financial restructuring that occurs in bankruptcy might affect the ability to pay or receive these supports. For example, if the paying spouse files for bankruptcy, they might seek to adjust the support payments to reflect their restructured finances. This can mean that they pay less support as they work to pay off their debts.
The right representation is key
Given the complexities involved in handling both bankruptcy and divorce, it is crucial to have the right support. A Newark family lawyer with experience in both areas of law can provide crucial support and guidance, helping to secure a stable financial and personal future post-divorce. They can also use their knowledge of both legal processes to help you create a strategy that protects your interests and gives you a stronger foundation for the next chapter of your life.
The interplay between bankruptcy and divorce requires careful consideration and strategic planning. Understanding how bankruptcy could impact your divorce can help you make informed decisions that protect your finances as you end your marriage.
