Tulsa Bankruptcy and Divorce

Chapter 13 bankruptcies usually take between three and five years to complete. During this portion of your life, much can change. Divorce ca occur while couples are still working through Bankruptcy and Divorce | Tulsa Bankruptcy Lawyers | a Chapter 13 plan. If this happens it can have implications on your bankruptcy. The following is a look at what happens if you seek a divorce during your Chapter 13 bankruptcy. We discuss possible implications and what you can do to continue towards forgiving  your debts.

Your Bankruptcy Attorney May Not Be Able To Do Your Divorce:

If you and your spouse retained a bankruptcy attorney for your through your Chapter 13, the attorney is deemed to represent you both. Attorneys have an ethical obligation not to represent two parties when there is a conflict of interest. If you and your spouse are divorcing, this holds the potential to create a conflict of interest. This is why your bankruptcy attorney may not be able to do the divorce. But on the other hand if you both agree it is still possible.

Options for Completing Your Bankruptcy and Divorce:

While obtaining a divorce during a Chapter 13  can make it more difficult to complete your repayment plan, it does not require you dismiss the bankruptcy. If you wish to continue your bankruptcy and obtain a discharge, there are several options available to you, including:

  1. Continue Making Regular Plan Payments: Even if you divorce, you do have the option to simply continue making regular monthly payments. However, this can become burdensome if you and your spouse cannot agree on how to split payments. In addition, your monthly budget may well have changed due to the divorce, making the former plan un-affordable.
  2. Convert to a Chapter 7 Bankruptcy: Your expenses may increase following a divorce. In some cases, this will be sufficient to convert your case to a Chapter 7 bankruptcy, if you were not able to qualify for Chapter 7 in the first place due to too much disposable income.
  3. Modify Your Repayment Plan: If you cannot or do not want to convert your action to a Chapter 7, you may be able to modify your Chapter 13 repayment plan to allow for lower payments that you can manage following your divorce. You will need to file a motion, with the assistance of your bankruptcy attorney, outlining your change of circumstances and requested reduction in payments. If approved, you continue your Chapter 13 plan to receive a discharge.
  4. Bifurcate Your Bankruptcy: You also have the option of separating your bankruptcy into two actions. You must request the court bifurcate your action, and with this action you will obtain the benefit of not being conjoined in a suit to your former spouse. Once the bankruptcy is bifurcated, you and your spouse can determine individually whether you wish to continue the action as a Chapter 13 or convert it to a Chapter 7.

Contact a Our Tulsa Bankruptcy and Divorce Attorneys:

Bankruptcy can offer a means of escaping from oppressive debt. It gives you a fresh start.  If you are considering filing bankruptcy, our bankruptcy and Divorce attorneys at South Tulsa Bankruptcy can help. Call our Law Office (918) 739-8984 to schedule a free consultation to discuss your bankruptcy options.

 

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