There are many things to consider when planning for a divorce. Of course, you will have to come to an agreement on how you will divide owned assets like property and finances. Large debt and financial difficulties might make you consider filing for bankruptcy. However, filing for bankruptcy while in the process of a divorce can be tricky and there are a few important things to consider.
Determining When to File for Divorce
Ideally, the most convenient time to file bankruptcy may be once the divorce is completed. However, waiting to file for bankruptcy until the divorce proceedings are over might not be an available option for everyone. A pending bankruptcy will change a few key components of the divorce process. Most notably, the New Jersey state divorce court cannot equitably distribute the marital property in the midst of a bankruptcy proceeding. The marital assets are part of the bankrupt estate, and will be administered in the bankruptcy proceeding by the trustee on behalf of the creditors.
It can be tricky deciding what information to include when a divorce is pending and the answers to these questions can affect your bankruptcy ruling. If you are unsure how to file or have questions about what information to include in the filing, it may be useful to work with a divorce lawyer.
How Bankruptcy Can Affect Divorce
While each bankruptcy and divorce case differ, there are a few general rules to understand. A pending bankruptcy and any stay under federal statute or federal bankruptcy court order cannot cancel, forestall, discharge or dismiss alimony support or child support obligations.
Other divorce obligations, however, like property debt or loans, may be forgiven under bankruptcy filing. It is useful to work with a divorce lawyer who is familiar with New Jersey’s divorce laws to better understand your individual options.
New Jersey Automatic Stay Laws
Under federal bankruptcy laws, an automatic stay is initiated after filing of the bankruptcy petition. An automatic stay essentially means that all creditors and debts are put on hold while the details of the bankruptcy are being determined. But it also prevents initiation of a divorce proceeding or continuation of a pending divorce proceeding. A motion may be filed in the federal bankruptcy court, however, to lift the federal bankruptcy stay insofar as dissolution of the marriage and support obligations are concerned.
Discuss Your Divorce Case With a Divorce Lawyer Today
If you are considering, or currently involved in, a divorce case, and you are also considering bankruptcy, it is important to reach out to an experienced lawyer as soon as possible. The assets, debts, and details of each divorce case differs, so it is crucial to work with a legal team that can help you navigate your case.
Going through a divorce or bankruptcy, even at the same time, doesn’t have to feel overwhelming. Let our team of experienced New Jersey lawyers help guide you through the process, ensuring that you know what to expect and when, while protecting your legal rights throughout the legal process.
Contact a Cherry Hill Family Law Attorney for a Consultation About Bankruptcy During Divorce in New Jersey Today
If you are thinking about filing for divorce, or if you have already started the divorce process and are dealing with another matter such as child custody, child support, or division of assets, you need to speak with a qualified attorney. The New Jersey family law attorney at the Law Offices of Daniel K. Newman represents clients throughout the state, including Camden, Cherry Hill, Gloucester Township, and Winslow. We understand how challenging this time can be for you, which is why we will fight hard to protect your interests, and the interests of your loved ones, throughout the legal process. Call us at (856) 309-9007 or fill out our confidential contact form to schedule a consultation. We have an office conveniently located at 1202 Laurel Oak Rd #207, Voorhees Township, NJ 08043.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.