Planning for Bankruptcy During a Divorce
If you are getting a divorce and there is a possibility that you may file for bankruptcy, it is critical that you speak with an experienced bankruptcy attorney who can advise you of your legal rights and responsibilities. While bankruptcy planning is permissible, there are rules and restrictions about property transfers and other transactions that must be followed in order to protect your rights.
The Look Back Period Transfers
When a person files for bankruptcy, the bankruptcy court will examine property and asset transfers for a period of time prior to the filing of the bankruptcy petition. This time period is often referred to as the look back period.
If you have transferred assets during the look back period without receiving fair consideration, a bankruptcy trustee can take corrective action that may be adverse to your interests. If a bankruptcy court judge feels that you have attempted to defraud your creditors, your bankruptcy petition could be denied. Since parties frequently transfer assets during and after a divorce, bankruptcy issues should be taken into consideration.
Post-Divorce Transfers
If you become entitled to property under a divorce decree or marital settlement agreement within six months after the bankruptcy filing, the property may be subject to turn-over for the benefit of your bankruptcy creditors. When people are facing divorce and bankruptcy, timing issues must be recognized and taken into consideration. At Golden Law, we can work directly with your divorce attorney to protect your interests in both proceedings.
Debt Allocation
In addition to the - issues surrounding transfers of property, parties to a divorce should be aware of debt allocation issues if one spouse is filing for bankruptcy after divorce and the other party is not. There are rules that may require you to pay the obligations of an ex-spouse despite the fact that the debt is discharged in your bankruptcy as to the creditor. If debts are to be allocated under your divorce, you should consult with an experienced bankruptcy attorney prior to entering an agreement under the divorce. At Golden Law, we can work directly with your divorce attorney to protect your interests in this regard.
Contact Us
To learn more about these and other bankruptcy issues in divorce, contact an experienced bankruptcy lawyer at Golden Law, PC. To schedule a free consultation, call 260-423-4400, or contact us by e-mail.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
