What can happen if couples have filed Chapter 13 bankruptcy and divorce? In the majority of circumstances, couples file for bankruptcy simultaneously. This is referred to as a joint bankruptcy. The duration of Chapter 13 is between three and five years. It is possible, during those five years, the two people will become unhappy together. Here we are talking about three alternatives that a lawyer can provide to a couple.
In a Hurry? Dial +18-503-850-342 Now!Chapter 13 Bankruptcy and Divorce: What You Need to Know?
The couple may decide to proceed with Chapter 13 bankruptcy. This alternative has two problems. The estranged spouses will be required to cooperate again to keep the case, which is hard when they have recently broken up. The Chapter 13 bankruptcy plan has to be paid, and the payment may be expensive for one or both clients. Clients can discuss the matter with their lawyer if the breakup qualifies for a reduced Chapter 13 payment because of the adjustment in expenses. Clients have to determine who is to pay the Chapter 13 plan or whether the payment is shared. If the clients do not agree, they would have to resort to using different counsel in the case of bankruptcy.
The bankruptcy counsel would be required to step down as an attorney if he/she is unable to counsel one party without compromising the other party. The couple can further convert the Chapter 13 case to Chapter 7 if the clients are unable to make Chapter 13 plan payments. The attorney will examine to ascertain if the client cannot convert to Chapter 7 due to excessive income or previous filings of bankruptcy. The attorney will examine other problems like exposure of assets and secured debt.
Divorced clients may lack the ability to settle secured debt like mortgage or car loans. Such clients will hence have to surrender the house or car for Chapter 7 conversion to take place. The court dismisses the case when a client fails to settle Chapter 13 payments and can no longer convert the bankruptcy. Once the case has been dismissed, both the husband and wife may seek the services of a lawyer to file a case independently.
Divorce During Chapter 13 Bankruptcy
Divorce petitions within the three-to-five-year duration of a Chapter 13 bankruptcy can have drastic consequences on your bankruptcy. Find out what you can anticipate if you file for Chapter 13 bankruptcy and divorce, and how to close out your case.
You Have Options to Finish Your Bankruptcy
Divorce in Chapter 13 bankruptcy makes it harder so that it’s harder to finish your payment plan. You do not need to give up on your bankruptcy. These are your choices if you’d rather keep your bankruptcy but still receive your discharge.
In a Hurry? Dial +18-503-850-342 Now!Go On Paying Regular Plan Payments
You can still pay your regular payments even when divorced in Chapter 13 bankruptcy. This may not be possible if you and your ex-spouse are unable to agree on how to divide your payments. The expense of divorce, together with the need to maintain two homes, can also hinder debtors from making their usual payments.
Converting to Chapter 7 bankruptcy
Two residences are much more expensive than one. You could be able to convert to Chapter 7 bankruptcy if you have raised your spending. A Chapter 7 bankruptcy is not necessarily best for you. You should not convert if you are seeking to save your residence from foreclosure and discharge non-dischargeable earlier obligations such as recent taxes. You likely will lose your residence and encounter tax collection issues.
Modify Your Repayment Plan
You may be able to reduce your Chapter 13 payments by modifying them if you don’t want to or can’t convert to Chapter 7. You will have less money available to make your Chapter 13 plan since your budget will reflect the cost of two residences, and you cannot change your payment if you have a great many secured debts, such as taxes and arrears on your home. The judge only has the option of varying the payment by you to general unsecured creditors such as medical charges, credit cards, and personal loans.
Submit a motion to reduce your monthly payment plan, and the court may approve it, allowing you to discharge your Chapter 13 bankruptcy.
Learn to Modify Your Chapter 13 Plan Payment
Discharge your Chapter 13 bankruptcy and re-file on your own. There is a simple method of avoiding the same bankruptcy as your ex-spouse. Simply stop payments and the case of bankruptcy in bankruptcy court is going to shut. You both are going to decide whether to apply for bankruptcy again. You’ll want to know if this plan will hold up financially before you finish your divorce. A bankruptcy lawyer will be able to tell you what to do and know if the court will cooperate with you (maybe by breaking up the payments).
Your Bankruptcy Lawyer May Have to Withdraw
Your attorney will speak for you and your husband if you do retain one to draw up your Chapter 13. Attorneys are not able to represent two parties with conflicting interests. Your attorney representing your bankruptcy will have to withdraw your representation if you and your husband become divorced. A conflict of interest occurs when your interests no longer align, and both parties would benefit from different outcomes. You would need to speak with another attorney to decide what the best option for your case would be.
Bottom Line!
If you have filed a Chapter 13 bankruptcy and divorce, the money and law parts can seem overwhelming. But you don’t have to navigate it alone. Regardless of whether you need to modify your repayment plan, switch to Chapter 7, or determine what is in your best interest in the future, an expert bankruptcy attorney will be capable of helping you and determining what choices are available to you.
Don’t allow financial difficulties to become part of the divorce issues—talk to an expert lawyer today at Bruner Wright PA so you may make the wisest decisions regarding your future.
Consult with experienced lawyers at Bruner Wright PA to safeguard you. Reach out today to an experienced bankruptcy lawyer regarding the best solution for your case.
In a Hurry? Dial +18-503-850-342 Now!