When a couples in New Jersey divorce, they normally understand that their property will be divided. If a bankruptcy petition is also filed, the bankruptcy will take precedence over any property and asset division order from the family court in the divorce.
After a bankruptcy petition is filed, the property and assets are considered to be a part of the bankruptcy estate. This means that the divorce may be delayed for a substantial amount of time until the bankruptcy discharge is completed. In some cases, a person wants to both file for divorce and file for bankruptcy. They should understand that the order of filing is very important.
If one spouse has a significant debt level and would otherwise qualify for Chapter 7 bankruptcy, they may not be able to get the discharge they want if they are married to a high-earning spouse. The bankruptcy court will consider the entire household income when determining whether the petitioner is eligible for Chapter 7 bankruptcy. In that case, the person may want to wait to file for bankruptcy until after the divorce is filed. Couples who are overwhelmed by debt together may want to file for bankruptcy protection before they file for divorce. This can give them both the financial relief they need.
People who want to seek bankruptcy protection and file for divorce may want to consult with a family law attorney, who might review their particular financial circumstances and then consult with a bankruptcy lawyer. If the cases are filed at the wrong time or in the wrong order, it can be disastrous for both the bankruptcy and the divorce. A family law attorney may work to make certain that such mistakes aren’t made and that their clients’ financial interests are not negatively affected during property division .