As an experienced Long Islanders divorce lawyer, I know those going through a divorce are eager to learn how their assets will be divided, but rarely consider what portion of the marital debt they will carry after they divorce. Loans, mortgages and debts are just as important in the divorce process as assets. (more…)
Long Island Divorce Lawyer Sees Bankruptcy & Divorce Go Hand-in-Hand in Nassau County and Suffolk County
As a divorce lawyer practicing in Nassau County and Suffolk County I have seen first-hand how often divorce and financial distress often go hand on Long Island. While we focus our practice on divorce and family law matters, we have a great deal of prior and current experience with the intricacies of bankruptcy law and cases on Long Island. (more…)
With the current economic downturn, many couples in and around the Tri State area, have struggled with job loss and foreclosures. One of the hardest hit areas has been Long Island, where the cost of living exceeds other geographical areas in the country. This added financial stress, is often a leading cause of couples seeking a divorce. It is crucial that couples facing economic hardship and going through a divorce, seek advice regarding bankruptcy and other debt resolution options prior to and during the divorce process.
The average debtor seeks to file either a Chapter 7 or a Chapter 13 bankruptcy. When filing a Chapter 7 bankruptcy, the debtor’s non-exempt assets are forfeited to the trustee and all of the debtor’s unsecured debts (i.e., charge cards, medical debts, personal loans, etc.) are completely discharged. Do not be alarmed, for the average Chapter 7 debtor, most if not all of their assets are exempt, and therefore, are not turned over the to estate.
A Chapter 13 bankruptcy is filed for one of two reasons, either, the debtor earns income above the threshold for his or her family size (each state has income thresholds for filing a Chapter 13), or, the debtor is behind on the mortgage and is seeking to prevent or stop a foreclosure action. In a Chapter 13 bankruptcy, a portion of the debt (usually 30% to 100%) is repaid by the debtor over a 3 to 5 year period. This is referred to as the Chapter 13 Plan. The plan payment is determined by considering the debtor’s income versus his or her reasonable expenses.
In certain situations, it may be beneficial to a couple to file for a joint bankruptcy prior to filing for divorce. Due to income guidelines for Chapter 7 versus Chapter 13 Bankruptcy, it is essential for couples seeking to dissolve their marriage to seek Bankruptcy Consulting and Planning. In less frequent circumstances, if the joint marital income of both spouses is above the income guidelines, the would make more sense for the parties to file for divorce first, agreeing upon the payment of maintenance (commonly known as alimony) and child support (if there are children involved), then initiate individual bankruptcy motions after the divorce is finalized. In this case, both parties have effectively redistributed their income, allowing the spouses to file individual Chapter 7 Bankruptcies, where as a married couple filing jointly, would be precluded from doing so.