Irvine Bankruptcy & Divorce Lawyer
Going through a divorce is already a challenging and emotional experience. Adding bankruptcy into the mix complicates matters even more. However, you do not have to go through it alone, nor should you. At The Law Office of Charles A. May, we provide compassionate guidance to help you navigate the intricacies of bankruptcy and divorce in Southern California. Contact our Irvine bankruptcy & divorce lawyer for personalized advice and assistance.
Understanding the Intersection of Bankruptcy and Divorce
When you are dealing with both bankruptcy and divorce, understanding how these two legal processes interact can give you a clearer path forward. Both can affect your financial situation significantly. They also influence each other in areas like asset division, debt responsibility, and alimony.
One of the crucial factors to consider is timing. Depending on your circumstances, it may be beneficial to file for bankruptcy before the divorce is finalized, or vice versa. For instance, filing for bankruptcy before divorce may allow you to eliminate your debts jointly, making the division of assets and liabilities simpler later on. On the other hand, going through a divorce first could be advantageous if spousal income affects your bankruptcy filing eligibility.
Different bankruptcy options can also have varying impacts on divorce proceedings:
- Chapter 7 Bankruptcy: This is often called “liquidation bankruptcy” because non-exempt assets are sold off to pay creditors, and most remaining debts are discharged. If both parties agree, this can be a quicker way to reset financially before finalizing the divorce. It’s quite possible to get a Chapter 7 discharge without having to sell any assets.
- Chapter 13 Bankruptcy: Known as “reorganization bankruptcy,” this allows you to create a payment plan to repay your debts over three or five years. Chapter 13 may be more complicated when a divorce is involved, as the payment plan might need to be adjusted.
Issues in Divorce Impacted by Bankruptcy
Bankruptcy can affect some of the major issues in your divorce, including the following:
- Asset Division – In a California divorce, marital assets are community property and are divided equally between both parties. If bankruptcy is filed beforehand, some of your assets might be liquidated to pay off debts. This could affect how much is left to divide during the divorce.
- Alimony and Child Support – In California, obligations like alimony and child support are considered “priority debts” and cannot be discharged in bankruptcy. However, bankruptcy can discharge other debts, potentially leaving you with more income to meet these court orders and other financial obligations.
- Legal Costs – Both bankruptcy and divorce come with their own set of legal fees. It is essential to budget for these and consider how one proceeding could impact your ability to afford the other. For example, filing for bankruptcy before divorce impacts the community property aspects of both assets and liabilities associated with the bankruptcy.
Contact The Law Office of Charles A. May for Help With Bankruptcy and Divorce in Irvine and Southern California
We understand that dealing with bankruptcy and divorce simultaneously can be overwhelming. That is why our experienced team is here to help you make informed decisions every step of the way. From evaluating which process to initiate first to guiding you through specific California legal requirements, we are committed to making your journey as smooth as possible.
To discuss your unique situation and explore your options, contact us today for a free consultation. You do not have to go through this challenging time alone; let The Law Office of Charles A. May be your trusted partner in Irvine and Southern California.
