In bankruptcy everyone filing is given a 'means test' by their Chicago bankruptcy lawyers. This test looks at your household income and determines what form of bankruptcy you qualify for.
If your household income is lower than that average of your state than you would qualify for chapter 7 bankruptcy. However if your income is above average then you would have to file for chapter 13 bankruptcy. In layman's terms the difference between chapter 7 and chapter 13 bankruptcy in Chicago is that with chapter 7 you liquidate all assets and at the end become discharged of all qualifying debts. Chapter 13 bankruptcy means that you keep your assets but have to make payments towards them for the next 3-5 years. It is not until this payment plan is completed that you will be discharged of debt.
Everyone's financial situation is different but anyone with a lot of debt but no assets would prefer to file chapter 7 bankruptcy in Chicago. For some couples that are struggling, accepting that their marriage is headed for divorce can be a way to qualify for bankruptcy. The 'means test' evaluates your household income. When two people are divorced they no longer share a household income. This makes it more likely that if two people divorce they can qualify for chapter 7 bankruptcy.
It is very unlikely that anyone would file for divorce simply to help qualify for bankruptcy however it could certainly be a contributing factor.
It is not uncommon for a divorce to be caused in part by financial burdens. The opportunity to liquidate those burdens through chapter 7 bankruptcy can be very appealing and certainly a desirable factor of divorce.
Whatever your situation, your Chicago bankruptcy lawyers will tell you that it is best to file for divorce first and then file for bankruptcy. Trying to do both things at the same time is likely to result in disaster.
DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Chang & Carlin shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.
