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At the end of your divorce case, there is typically a lot of new expenses which gets toppled onto the harsh reality that most families go from a two income household to one. After the divorce, it can be hard financially especially if it was a hard fought out battle that lasted over a year. These are the realities of divorce. However, if you plan properly, as we do, there is light at the end of the tunnel even if you are facing a bankruptcy.
Bankruptcy is not a dirty word. It is a legal means of discharging debt to allow you get a fresh start. Just because you are filing bankruptcy also does not mean you are a failure. There are many individuals and businesses that have filed bankruptcy and are blossoming financially afterwards. There are too many names to mention, but just a few include:
- Donald Trump,
- David Neagle (check him out if you don’t recognize the name),
- Curtis “50 cent” Jackson,
- George Foreman,
- Larry King,
- Cindy Lauper
- Etc.
As you can see, bankruptcy is simply a tool that people have at their disposal to legally get out from under a mountain of debt. After a divorce, it may be plenty.
When you are considering a bankruptcy after the divorce, it should be considered early on in the case as it can be used as a bargaining chip. When the parties are negotiating the terms of how they are going to split up their property, it always starts out with a 50/50 situation as everyone knows that unless there are some compelling circumstances, the court is going to split everything as close down the middle as possible. That being said, if bankruptcy is on the table, during the negotiations, you can offer to receive more of the property in exchange for taking on more of the debt and after the divorce is finalized, it is possible to get that debt discharged through bankruptcy.
Now, bankruptcy in Idaho offers some pretty handsome benefits to help you get a new beginning after divorce. The whole family law case is pretty draining, so some relief thanks to the bankruptcy code can be pretty nice. Some of the main benefits, things you get to keep, are as follows:
- You get to keep up to $7,500 in household goods and furnishings (couches, kitchen items, beds, etc.)
- You get to keep up to $1,000.00 in jewelry,
- If you run a business, you will get to keep up to $10,000.00 worth of “implements, professional books, business equipment and tools of the trade and a vehicle up to value of $10,000.00
- If you have stockpiled up on food and water, a 12-month supply is exempt from bankruptcy
- If you own a gun, you are entitled to one (1) (or two if you are filing with your spouse) firearm worth up to $1,500.00
- Now, here is the big-ticket item, especially in this market, if you own a home and have less than $175,000.00 in equity in the house, you get to keep the house and the bankruptcy court cannot come after the house or the equity.
As you can see, bankruptcy may have some pretty significant benefits after your divorce case has been finalized. There are some things that will not be exempt and also not able to get discharged in the case, but that is a better discussion to have one-on-one with a bankruptcy attorney for a deep dive into your finances and the benefits and viability of your bankruptcy because there are some eligibility requirements as well. For instance, you may not be eligible for a chapter 7 bankruptcy if you make too much money.
If you are going through a divorce and want to discuss getting your case completed and the possibility of bankruptcy, contact the experienced Idaho Family Law Attorneys here in the office today for a consultation.