To Declare or Not to Declare: Dealing with Bankruptcy During an Illinois Divorce
Posted on February 04,2022 in Divorce Finances
In an ideal world, love would be all we need to be happily married; in real life, financial conflict can lead to serious problems in a marriage. Whether one spouse refuses to live within their means, does not pursue gainful employment, or consistently fails to pay monthly bills on time, differences in financial behaviors and opinion about how to manage finances leads to many divorces in Illinois.
In some situations, the financial problems a couple faces may leave them contemplating bankruptcy as they are simultaneously filing for divorce. Understanding how divorce and bankruptcy can influence each other is essential for making wise decisions about your finances now and setting yourself up for success in the future.
Can We File for Divorce and Bankruptcy at the Same Time?
While a couple can technically file for divorce at the same time as they file for bankruptcy, bankruptcy is a federal process that will take precedence over divorce. A bankruptcy court may require a couple to finalize their debt problems before they finalize their divorce, which could delay the divorce and make it more difficult to address personal issues between spouses that may be causing the financial problems to begin with. An Illinois judge may allow the parts of the divorce that are unrelated to finances to move forward, but the final divorce decree will not be handed down until the bankruptcy is complete.
Should Divorce Come Before or After Bankruptcy?
While every situation is different, most experts recommend a couple file for bankruptcy before they file for divorce. There are several benefits to this. First, a married couple can file for bankruptcy together. This allows them to double their property exemptions, potentially keeping more valuable assets like their home. Bankruptcy also allows couples to work through their financial issues with a trustee who is an expert at debt management. Finally, as soon as a couple files for bankruptcy, the bankruptcy court will put an automatic hold on debts so collectors will stop calling and processes like home foreclosure and wage garnishments will halt until the process is resolved. This can be a major source of stress relief for couples who are trying to juggle multiple creditors.
Call a DuPage County Divorce and Bankruptcy Lawyer
Dealing with the two-pronged issue of divorce and bankruptcy at the same time can be overwhelming. Fortunately, the experienced Wheaton, IL divorce and bankruptcy attorneys with Andrew Cores Family Law Group may be able to help. We have helped divorcing couples in very complex situations solve their problems in a sensible, strategic way. Call us today at 630-871-1002 to schedule a free consultation.
Sources:
https://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=075000050HPt%2E+IV&ActID=2086&ChapterID=59&SeqStart=3900000&SeqEnd=5400000
https://www.experian.com/blogs/ask-experian/what-is-chapter-7-bankruptcy/
