Financial difficulty is one of the main reasons that Ohio couples file for divorce. While ending the marriage may be the best option for your individual situation, this option does not mean that your financial struggles will be over once the process is finalized. In fact, debt and money woes can follow you for years after the divorce is final.
For some people, the financial impact of a divorce is what necessitates a bankruptcy filing. Others may find that they are unable to meet their financial obligations even before a separation. No matter what the circumstances of your unique situation may be, you deserve to know your options and seek the outcome that provides you the best opportunity for a strong financial future.
Chapter 7 versus Chapter 13 bankruptcy
Bankruptcy is a reasonable option for any individual who cannot pay down debt without help. This decision often comes after months of late payments, calls from creditors and even threats of foreclosure or repossession. If you are facing divorce and are already in that position or anticipate that you will be shortly after the process is final, you may consider either Chapter 7 or Chapter 13 bankruptcy.
Either type of consumer bankruptcy may offer you certain benefits when you find yourself at the crossroads of overwhelming debt and divorce. Consider the following:
- Chapter 7: Chapter 7 is liquidation bankruptcy. This process can eliminate unsecured debt, such as medical bills or credit card bills. Most Chapter 7 bankruptcies can be completed within a few months, so it is possible to file and complete the process before your divorce is final.
- Chapter 13: Chapter 13 bankruptcy reorganizes debts, which the applicant will then pay off over a period of three to five years. This type of bankruptcy may be best for people who have defaulted on secured debts, such as a mortgage.
The best option for you will depend on the type of debt you have, your income and your anticipated post-divorce financial capabilities. Making the right choices regarding your financial future is complex, and working with an experienced bankruptcy attorney can ensure that you follow the path most appropriate for your needs and objectives.
The choice to file for bankruptcy, especially when it comes just before or after a divorce filing, is not an easy decision. However, this process can allow you to effectively confront your debt and establish a strong financial future, even after divorce.