Picking up from where Bankruptcy & Divorce in Colorado: 6 Things to Consider (Pt. 1) left off, here, we will carry on our discussion regarding some of the specific factors that couples should consider when they may share a significant amount of debt and they are seriously thinking about pursuing bankruptcy and divorce in the near future.
Additional Things to Think about with Bankruptcy and Divorce in Colorado…
2. The Amount of Non-dischargeable Debt a Couple Has
It’s important that couples who are considering both bankruptcy and divorce understand that there is some debt that will NOT be discharged through bankruptcy proceedings. This type of debt, which is usually referred to as non-dischargeable debt includes (but is not necessarily limited to):
- Student loan debt, as the specific individual who took out this loan will be on the hook for repaying it even after a bankruptcy case
- Certain tax debts, which both partners in a marriage may be responsible for repaying regardless of a bankruptcy case if this tax debt was associated with a joint income tax filing (or certain other tax-related issues)
- Domestic support payments, which are typically put into place after a divorce has been finalized – this can include both spousal support and child support payments.
When a significant amount (or the majority) of a couple’s debt is non-dischargeable, it may still be a good idea to file for bankruptcy before filing for divorce, as there may still be some dischargeable debt that a couple can get rid of before their finalize the end of their marriage.
Here, however, couples should remember that the specific details of their financial situation should be discussed with an experienced bankruptcy attorney before filing (or completing) either a bankruptcy or divorce case.
3. The Type of Bankruptcy Case a Couple Qualifies for and/or Intends to Pursue
Whether a couple intends to pursue a Chapter 7 bankruptcy, a Chapter 13 bankruptcy or some other type of bankruptcy case will be another crucial aspect to consider when it’s time to decide whether filing for bankruptcy or divorce first is the best idea. Specifically, here’s what these couples should be aware of:
- Chapter 7 bankruptcy cases can be completed relatively quickly and can get a substantial amount of a couple’s debt discharged before the divorce case. However, because couples have to meet certain eligibility requires for filing for Chapter 7 in Colorado (including income and residency requirements), this option may not be available for all couples.
- Chapter 13 bankruptcy cases can be far more complicated than Chapter 7 cases, and they may end up taking a lot longer to resolve (as the repayment plans for Chapter 13 cases can span 3 to 5 years). In these cases, whether it’s better to file for bankruptcy first should be discussed with an experienced attorney to ensure that an individual is minimizing future potential costs and headaches.
Be sure to look for final part of this blog to come for some more important info about filing for bankruptcy and divorce in Colorado.
Colorado Bankruptcy Lawyers at the Law Office of Jon B. Clarke, P.C.
If you are overwhelmed by seemingly insurmountable debt and are looking for a financial fresh start, contact the trusted Colorado debt relief and bankruptcy lawyers at the Law Office of Jon B. Clarke, P.C.
For more than 35 years, Mr. Clarke and his diligent support staff have been successfully helping our clients resolve even the most complex bankruptcy cases for both individuals and businesses alike. Our experienced legal professionals are committed to providing each of our clients with the personalized debt relief assistance they need, and we will work tirelessly to ensure that our clients’ cases are resolved as favorably and efficiently as possible.
Contact Us Today
For a thorough assessment of your situation, along with expert advice regarding the best manner in which to move forward to unburden yourself from debt, call us at (866) 916-3950 or email us some details about your situation by clicking here.