Phoenix Attorney for Bankruptcy After Divorce
Legal Assistance with Bankruptcy After a Divorce in Phoenix
Divorce can cause significant emotional stress and financial pressure. The cost of litigation and court judgments regarding the division of marital assets can lead to mounting debts. However, those debts do not have to add to your stress when you choose the right Phoenix bankruptcy lawyer to assist you with bankruptcy after a divorce.
You can rely on Hilltop Law Firm to help you reclaim control over your finances after a divorce. We are a family-operated law firm with a deep understanding of the economic and legal implications of divorce and bankruptcy. With nearly a decade of legal experience and two years of banking experience, attorney Cy Hainey can guide you through some of the most difficult challenges facing you and your family.
For a complimentary consultation, call us at (602) 466-9631 today.
Understanding the Financial Impact of Divorce
In the aftermath of a divorce, one or both of the parties may face significant financial and legal obligations, such as:
- Dividing community property: Upon divorce, the parties agree to a division of community property, such as bank accounts, investments, retirement accounts, real estate, and personal property. Additionally, the parties also assume their portion of community debts.
- Spousal support: One spouse may be obligated to provide financial support to the other spouse upon divorce to help them maintain a similar standard of living as when they were married.
- Child support: In divorces involving children, one parent may be obligated to make regular child support payments in situations where they do not have custody of their child.
- Tax liability: Divorce can result in significant changes in filing status, exemptions, deductions, credits, and other tax liabilities.
When these obligations lead to overwhelming debts, bankruptcy may provide effective tools for taking control over financial obligations.
Bankruptcy Options for Individuals After Divorce
There are two primary paths for filing for bankruptcy to deal with divorce obligations:
Chapter 7 Bankruptcy
A court-appointed bankruptcy trustee will manage the repayment of debts by liquidating certain non-exempt assets. Under Chapter 7 bankruptcy, a divorce spouse’s remaining assets may be vulnerable to liquidation. However, certain assets are exempt from liquidation, including homes and vehicles.
Importantly, Chapter 7 bankruptcy does not discharge the obligation to pay spousal or child support. However, it can discharge other unsecured debts to make meeting such commitments easier. Furthermore, the spouse burdened with support orders may be able to get the court to modify the details of their support orders.
Chapter 13 Bankruptcy
The court works with individuals to establish a repayment plan to address their financial obligations. The repayment plan depends on income, living expenses, and current obligations—such as spousal and child support. Chapter 13 bankruptcy may provide a spouse with the opportunity to modify the terms of a support order in light of their changed financial circumstances. Importantly, Chapter 13 may help the petitioner deal with past-due support payments.
The appropriateness of either Chapter 7 or Chapter 13 bankruptcy depends on the relevant circumstances of each case. Therefore, it is essential to seek legal counsel when determining which bankruptcy path to take.
The Benefits of Bankruptcy After Divorce
Filing for bankruptcy may provide critical benefits for dealing with debts in the aftermath of divorce. For example, certain joint debts that the spouses assumed during marriage may survive the divorce process. Fortunately, filing for bankruptcy may discharge joint debts. Furthermore, bankruptcy can help protect certain assets and property from the actions of debt collectors.
A crucial benefit of filing for bankruptcy is the imposition of an automatic stay on debt collector actions. Because divorced spouses sometimes have fewer assets and financial resources than unmarried individuals, the automatic stay can be a powerful tool in regaining financial control in the aftermath of a divorce.
Bankruptcy provides individuals with a fresh financial start. In many bankruptcy cases, petitioners are required to take credit counseling courses and debtor education courses. These help individuals develop the skills for maintaining their financial health after divorce.
Consult with an Experienced Arizona Bankruptcy Attorney
Because the interplay between divorce law and bankruptcy law can be complicated, it is crucial to seek legal advice from an experienced bankruptcy lawyer to help guide you through the legal process. A knowledgeable attorney can lay out the pros and cons of your legal options so you can make an informed decision about your financial future.
If you are considering filing for bankruptcy after a Phoenix divorce, Hilltop Law Firm is ready to advise you on your best course of action. Our Phoenix legal team is dedicated to delivering compassionate and effective legal counsel to help you take control of your finances and transition into a new chapter of your life.
Reach out to us at (602) 466-9631 to schedule a free consultation.