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.
Wisconsin Divorce Quick Facts
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)
Should I File For Bankruptcy Before or After Divorce?
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.
Final Thoughts On Divorce And Bankruptcy
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.
Two Google reviews we received recently about filing bankruptcy due to divorce:
- “I had a divorce that required me to file. My attorney was the best. Always answering all my questions and helped me with what to do next. Later on I referred my son to do to them as well. I wouldn’t recommend anyone else to help in your financial need.”
- “After my divorce, I thought I was too broke to afford another attorney to help me through bankruptcy. Working with Michael George, and the Debt Advisor’s team was affordable and pain free. Debt Advisors worked with my schedule. I completed the whole process using virtual meetings and emails. Their payment terms fit my budget. Making the decision to file bankruptcy was the hardest part of the process. I saw the benefits of my bankruptcy quickly. A week after my petition was filed: I got an email saying my credit score improved by 90 points. A month after: the past due amount on my cable bill was gone.”