Morristown Divorce Attorneys: Debt and Bankruptcy
Financial challenges, disagreements on spending, and/or lack of a unified and agreed upon household budget are often contributing factors when individuals entertain the prospect of divorce. When considering divorce finances often play a role, including but not limited to, the strain that debt can place on a relationship. There is no clear-cut answer or strategy when facing the hurdles that debt and marital uncertainty or dissatisfaction represent. Depending on one´s personal situation and contemplation as to whether or not a marriage is worth or able to be saved, spouses may choose to file for debt relief through bankruptcy over filing for divorce.
Though each filing is unique, bankruptcy is governed by federal law, while divorce is governed by state law. Fortunately the bankruptcy code has protections built in for family law issues like mediation, divorce and custody; which could make the debt relief process less overwhelming and creates alternative options to divorce that maintain the family structure.
Equitable Distribution in New Jersey Divorce Cases
As an equitable distribution state, for individuals who pursue divorce or dissolution of civil union litigation in New Jersey, all assets and debts determined to be marital property will be divided equitably (fairly) though not necessarily equally. Debt accrued during a marriage will most likely be considered marital debt, even if a debt (credit card or loan) was incurred by one spouse.
When it comes to equitable distribution during divorce proceedings, debt must be fairly divided in a similar fashion to assets including complex assets, retirement assets, family-owned and private businesses, and more. There are, however, some specific considerations that are unique to debt division during a divorce.
The equitable distribution attorneys of Jacobs Berger, LLC have extensive experience helping clients navigate the waters of debt relief, divorce, and complex asset division. We take the approach that each case is an opportunity to help our clients build a financially secure foundation for their family’s future. Our legal team takes the time to understand your unique needs and concerns in order to offer dynamic and personalized solutions as we have done for clients in New Jersey towns including Morristown, Randolph, Madison, Morris Township, Tewksbury, Rockaway, and all of Morris County.
Impact of Bankruptcy on Morris County Divorce
Whether your consideration to file for debt relief via bankruptcy is to better understand the impact it can have on your future financial well-being, or due to your pending divorce litigation, an experienced debt relief and asset division attorney is essential to finding the best means to address your debts, and find manageable solutions for all involved parties.
In some cases married, same-sex, or civil union couples who are considering divorce or dissolution proceedings, may choose to address their debts together to ensure the best opportunity improve their current financial health or with the eye to support themselves and any dependents, in the future.
Divorce filings generally prompt requests, to discharge financial claims of: alimony, child support, and property settlements. When resolving debts through a bankruptcy, it´s critical to remember that alimony and child support claims generally cannot be discharged in a bankruptcy proceeding and claims for property settlement may generally be discharged if the divorce judgment has not been entered yet.
Household size, income, and type of bankruptcy (Chapter 7 or Chapter 13) can impact the type of bankruptcy exemptions one may be eligible for. Whether you file for bankruptcy before or after your divorce or marital dissolution, separately or jointly, our attorneys will work with your situation to determine and execute the best plan for your individual needs.
Filing for Debt Relief Prior to Divorce in New Jersey
Spouses filing for joint bankruptcy can save time and money, and possibly their relationship itself as one (1) court filing fee is paid, and there is often a greater chance for individual debt liability and increased exemptions when filing.
In addition, spouses may be able to discharge additional debt (e.g., personal loans, medical costs, and credit cards), thus possibly making any later negotiation pertaining to the division of marital assets or property, easier.
Finances can produce a significant strain on any relationship and the sensitive tension surrounding this issue can lead to other stressful situations. Reducing the amount of financial stress can improve the chances of maintaining a healthier marital or co-parenting relationship in the long-run.
Resolve Collections Issues with the “Automatic Stay”
For spouses filing for bankruptcy the “automatic stay” can be a godsend. An automatic stay goes into effect immediately after a Chapter 7 or Chapter 13 bankruptcy filing. This prevents any further debt collection proceedings and should stop foreclosure proceedings and credit collections calls. In addition, if a divorce is already pending when one spouse filed for bankruptcy, the automatic stay puts divorce proceedings on hold. If you are the spouse with debts like child support or alimony, this can be very helpful. This can be problematic, however, if you are the spouse who is owed money.
Contact our Morristown Marital Debt and Divorce Lawyers Today
At Jacobs Berger LLC, our attorneys want to help our clients find a way to amicably and cooperatively resolve any existing debt issues that may have existed in their marriages. We approach this process as an opportunity to build a new, strong financial foundation for the future. This unique and dynamic method has led to successful resolutions of equitable distribution of assets and of debt for our clients in local New Jersey communities such as Randolph, Morristown, Madison, Denville, East Hanover, Dover, Rockaway, and all of Morris County.
To speak with one of our qualified family law and debt attorneys today, please contact us online or call our Morristown office by dialing (973) 710-4366 for a strategic planning session regarding your divorce, your division of assets, and your debt.