Couples who are facing serious financial problems in Florida often end up making the decision to get divorced. When this happens, they may also want to evaluate a variety of options for how to address their debt. Filing for bankruptcy may be one solution they wish to consider but there are multiple factors that should be considered in order for them to make the right decision for their situation.
There are two types of bankruptcy commonly used by consumers. Chapter 7 is the most well-known consumer bankruptcy and it essentially extinguishes all debt included in the case. It may also result in the loss of some assets. A Chapter 13 bankruptcy plan does not see the loss of assets but rather acts as a structured repayment plan. Homeowners sometimes look to this type of plan to save their homes.
As explained by My Horizon Today, filing a Chapter 13 bankruptcy prior to getting divorced may keep a couple linked for much longer than they might like. This is because these plans last between three and five years. This may make a Chapter 7 plan more attractive to couples wanting to move on with their lives separately. Another consideration is how well divorcing spouses can cooperate in order to go through a joint bankruptcy prior to getting divorced.
Bankrate urges consumers to do their homework on what their divorce decree might dictate in terms of responsibility for debt once the divorce is final. This judgment may preclude a bankruptcy filing after the divorce in some situations.