Divorce causes some major adjustments. It can also provide an opportunity to reset financial priorities and gain a fresh new start. When contemplating or pursuing divorce, it’s advantageous to be familiar with how debts, assets, liabilities, and income can be impacted. This article briefly covers Wisconsin’s “no-fault” status and some key points about bankruptcy including the best time to file.
Arguments about money and spending can wreak havoc on any relationship. For Some, the financial situation is the last straw before filing for divorce. Furthermore, divorce can be the driving force behind filing bankruptcy. Here are some quick facts about Wisconsin divorce rates and how marital debt is divided our state:
• Wisconsin is a “no-fault” state meaning that either party can achieve a divorce
• Wisconsin is a “community property” state regarding marital property & debt
• 22% of divorces cite “money issues” as top reason for divorce
• Nearly 11% of Wisconsin is divorced; subsequent marriages have higher divorce rates
• Most uncontested divorce proceedings take 6-12 months to finalize
• Assets & debts by either spouse during marriage are ordinarily shared in a divorce
• (2020 U.S. Census Bureau, WI Dept. of Health & Services, Bankrate)
Which bankruptcy you qualify for, (chapter 7 or chapter 13), will ultimately have an impact on how your future plays out. The same can be said for the “timing” of bankruptcy. Here are some quick facts:
• Bankruptcy “automatic stay” protections take effect regardless of which type of bankruptcy you file, or when it is filed
• File a joint petition before divorce to eliminate or reduce debts which would otherwise be divided during divorce proceedings (may also reduce the divorce cost)
• File after divorce if both parties individually wish to qualify for Chapter 7 liquidation & cooperation to file a joint petition is impossible.
It is important to clarify that a divorce judgement is binding to your relationship, but not to your creditors. If an ex-partner fails to pay up on court-ordered debts, the creditor can still come after you for payment.
After considering the implications of divorce and bankruptcy, it’s crucial to explore all available options and consult with a professional. By visiting My Debt Advisors, you can access a wealth of information and resources that can guide you through the process. Specifically, the Divorce and Debt page offers insights and advice tailored to those dealing with the financial complications that often arise during a divorce. Navigating these complex situations can be overwhelming, but with the right support, you can make informed decisions that will benefit you in the long run.
People often seek our advice during a separation from their spouse, or at some point in the divorce process. To ensure that you’re making the most informed choices about your financial future, request a free consultation as soon as possible. We are here to answer your questions. Rest assured, we will do our best to reduce your stress load during these most difficult life-situations. The timing of filing a bankruptcy while a divorce is contemplated or filed is a nuanced decision that requires a consultation with an experienced attorney.If you are in the Milwaukee area and facing such challenges, our local Milwaukee office can provide specialized assistance tailored to your needs.
Two Google reviews we received recently about filing bankruptcy due to divorce: