Now that your divorce is imminent, you may wonder how you'll get through the separation from your spouse financially intact, especially if you have very little income of your own and kids to care for. If you have bills and other critical monthly expenses, the divorce could potentially devastate to your finances. Bankruptcy is an option your attorney may suggest you take to help you overcome your financial problems after your divorce. In addition, you may want to refocus your energy on rebuilding your income and life. You can survive your divorce and bankruptcy. Here's what you need to know about bankruptcy and tips to rebuild your life.
What Can You Discharge in Your Bankruptcy?
If your attorney suggests that you file Chapter 7 bankruptcy because your low monthly income, the court will discharge the majority of your unsecured debt, which are bills that don't require collateral to obtain or keep. But you can't generally discharge any secured, government or most privately-owned debt, such as school loans, unless you can meet certain criteria. For example, if your divorce leaves you in extreme poverty, and your income only covers enough to care for your kids' living necessities, the court may discharge your secured debt.
Unless the divorcing spouse signed his or her name on any of the financial obligations above, they fall solely on you to pay. Additionally, you still need to pay your monthly utility bills, food bills and other essential living expenses to care for your kids properly. Your obligations may or may not include the mortgage loan on your home.
Should You Keep Your House or Give It Back?
If the divorcing spouse co-signed a first or second mortgage on your home and wants nothing to do with the house after the divorce, you need to consider whether or not you should keep the home or give it up in your bankruptcy. Although it's a difficult decision, you may find your answer if you ask yourself these three questions:
If you answered no to any of the above questions, you may want to surrender the house and let your attorney add it to your bankruptcy case. Surrendering your home may not be as bad as you think. Once you add it to your Chapter 7 and provide evidence of your limited income, the mortgage's lender may not have the ability ask for payment or sue you once it sells the home. Your attorney will discuss this with you in great detail during your bankruptcy appointment.
Once you go through all of your financial obligations, think about finding better employment after your bankruptcy and divorce. Keep in mind that you may want to wait until your bankruptcy discharges to do so. If your income increases during your Chapter 7 filing, the court may not eliminate as much debt as you want.
How Do You Rebuild Your Finances After Divorce and Bankruptcy?
There are numerous options you can take to rebuild your finances after your life-changing events. You can find employment online as a freelance writer, product reviewer or customer service representative. These types of jobs allow you to work at home without paying the expenses of child care or commuting back and forth to a brick-and-mortar job. You also work on your own schedule, which means you may have the opportunity to work as little or as much as you want.
Your spouse's child support obligations may help you achieve some peace of mind as well, so remember to pursue child support during your divorce proceedings. The majority of states don't count child support as regular income in bankruptcy. You shouldn't worry about creditors taking it during the proceedings.
Don't be afraid to seek help from your state, such as housing and utility assistance. If necessary, move into a smaller home or apartment and rebuild your finances up enough to move forward to a larger home in the future.
If you need additional answers about bankruptcy and how to survive your life's changing events, contact your attorney immediately for assistance.Share
27 January 2015
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