Divorce Attorney Questions Bankruptcy Law

Being a bankruptcy lawyer and divorce attorney, or at least knowing a lot about one of these fields while practicing the other, can be a good idea. Perhaps the overarching reason behind this is that there is a lot of financial turmoil involved in a family law break up, and people are sometimes looking for a fresh start. This can lead either type of legal remedy to lead into the other, meaning that it can be helpful and lucrative to know both.

One of the problems with exiting a family law break up is that it can sometimes be the case that you will not be able to sustain the standard of living enjoyed while the two of you were still together. By this, the law will usually require that the two of you will have to have two places to live, and you previously had just one place to live while the two of you were still legally married. In other words, you may have to make do with spending more money with fewer assets.

This can become a particular problem where have a lot of outstanding debts, such as a mortgage. Banks often are reluctant to refinance a debt into one person’s name alone, if that spouse does not have the means to pay the debt themselves. This means that the spouse who is not awarded the family home will not want to pay a debt that that spouse does not enjoy the benefit of. As a result, this spouse could consider bankruptcy law as an option and bring in as creditors to be sought relief from the creditor to the house and maybe even the other spouse.

There are some debts that result from a family law break up that are not possible to go bankrupt on. Also, it is unclear whether a divorce attorney is qualified to do a means test, but this may depend on the lawyer’s understanding of the federal law on this.
The reason for this is that people generally file for bankruptcy protection when they realize that either their debts exceed their assets and earning capacity to pay their debts or they wish to restructure their debts so that they will not be as burden with them as they otherwise would. It is not infrequent that a divorce attorney advises a client that they will likely be leaving a family law break up having more debt than both the ability to pay and the assets to cover the debts. In other words, some clients will be essentially insolvent.

The above material is intended for information purposes only. It is not intended as professional legal advice and should not be construed as such. Will Beaumont practices law in New Orleans, LA, and Metairie, LA.