Deciding On Bankruptcy During Or After Divorce
The divorce process does a good job of requiring people to seriously examine their finances. If you are going through a divorce or have recently been through it, you know you must list every piece of property you own that has value, as well as all of your income sources and all of your debt. When doing so, you may have been surprised by the amount of your debt and realized you need a solution to bring your finances back in order. Or perhaps you have fallen behind on child support payments and are not sure how to catch up.
I am attorney Sean T. Flynn. I work with individuals going through divorce, as well as the recently divorced, to help them decide if bankruptcy might be their best option for a fresh start. I have over 10 years of experience helping people in Austin and the surrounding area.
When Should I File For Bankruptcy?
Keep in mind that filing for bankruptcy in Texas after you file for divorce but before your divorce is finalized may put your divorce proceedings on hold. The bankruptcy court may put a “stay” on dividing your marital property and marital debt in the divorce until it decides you can proceed. For this reason, some people choose to file for bankruptcy before they file for divorce or wait until the divorce is final.
Deciding whether to file Chapter 7 or Chapter 13 bankruptcy depends on each person’s financial situation. I will take the time to walk you through a Chapter 7 eligibility test called the “means” test to see if you qualify, or if you will need to file for Chapter 13 instead.
What About Child Support And Alimony?
Filing for bankruptcy does not mean you can stop paying child support or alimony. These are court-ordered payments that you cannot discharge in debt. The good news is that bankruptcy can reduce or eliminate other debt you may owe, which can free up more funds to pay your support obligations. I will work with you to put together the best plan for your unique situation after thoroughly evaluating your needs.
In order to lower your court-ordered support obligations, you must request a modification through the family court, which your family law attorney can assist you with. If you have fallen behind on payments and owe child support arrears, Chapter 13 bankruptcy may allow you to catch up on your back payments through your repayment plan. If you file Chapter 7, your assets will go toward paying off child support debt first.
Discuss Your Case With Me
To find out more about how divorce and bankruptcy may work together, schedule a consultation with me at my firm, The Law Offices of Sean T. Flynn PLLC. I am here to help. I look forward to talking with you and creating a strategy tailored to your needs. You may call my office at 512-764-3791 or reach out online.