Timing is Critical
Red Hill Law Group understands timing can be crucial in a divorce/bankruptcy interaction. Therefore, we collaborate with your family law attorney or provide a highly experienced family law attorney to develop the strategy most beneficial to your situation. Because the filing of a bankruptcy petition generally brings all of the debtor’s interests in separate and jointly held property into the bankruptcy estate, brings all community property into the bankruptcy estate, and stays all of the property distribution aspects of a pending divorce case, a client contemplating divorce or separation needs to be aware of the potential consequences that delay in obtaining a dissolution decree and final entry of property distribution orders may have on his or her property interests. Although there are situations in which it might be advisable for a client to delay filing bankruptcy until a divorce action has been completed, more often a family law practitioner will be advising a client to speed up the divorce process to beat a potential bankruptcy filer to the punch. On the other hand, if a couple contemplating a separation and a joint or separate bankruptcy filing are on sufficiently amicable terms, joint planning could reap significant advantages for both spouses.