When Newly Divorced Individuals Declare Bankruptcy
Chapter 7 Bankruptcy Lawyer Clearwater, FL
When two people exchange vows at the altar, they typically plan to be together for life. However, this may not be what fate has in store for them. In fact, it is estimated that about 50% or more of marriages shall ultimately end in divorce. Regardless of why things ended, it is likely that both partners are to endure some sort of heartache, stress or grief. Not only that, but either spouse may suffer severe financial distress as well.
It can be a terribly difficult time, as each partner adjusts to major changes including their financial status. Severe financial hardship may lead a recently parted spouse, to wonder if filing for bankruptcy is right for them.
What is the biggest challenge financially for newly divorced individuals?
In some cases, an individual recently divorced may be living paycheck to paycheck, without extra to spare to pay off debts. For example, a person who was accustomed to two sources of income, may find new challenges supporting themselves on their own. The divorced spouse may find they do not have as much of a disposable income as they originally thought, and may have to become more frugal in habit. This may be even more true for those who had a spouse that maxed out credit cards or was otherwise careless with money. Now the other half may have to pay these debts all on his or her own.
What is the difference between Chapter 7 and Chapter 13 bankruptcy?
The most commonly used bankruptcy chapters are 13 and 7. Chapter 7 is often referred to as “liquidation bankruptcy” where the bank may have to relinquish or sell property in order to settle debts. Chapter 7 may be most suitable for people who are not attached to their belongings.
Chapter 13 entails a repayment plan where the individual has to pay off their debts over the course of 3-5 years. Depending on the person’s financial struggles and earnings, he or she may have to pay only a portion back while the rest is cleared after the term has been served. Any recently divorced spouse may want to meet with an attorney for help deciding which chapter may be most beneficial.
Will my credit score be impacted?
An individual’s credit score may lower temporarily after declaring bankruptcy, but this is something that can be slowly increased over time. Additionally, the individual may have the bankruptcy status on his or her credit report for around ten years. Many people can be understandably worried about their credit score after filing for bankruptcy. But, this may be a small price to pay for some depending on how much debts they are able to discharge by declaring bankruptcy. Your attorney can talk with you further about how your credit score may be impacted, along with strategies to get it raised back up faster.
Should I meet with an attorney about filing for bankruptcy?
It is highly recommended that any person recently divorced sees a chapter 7 bankruptcy lawyer Clearwater, FL relies on at Ziegler Diamond Law: Debt Fighters about their finances. By consulting with an attorney for advice, an individual can decide whether filing for bankruptcy is right for them or if there is another option.