Simplifying Bankruptcy And Divorce

Apr 11th, 2014 | By | Category: Debt

When a marriage is dissolved, there are financial issues that must be treated with. Sometimes the amount of debt is insurmountable and bankruptcy may be the only way for either or both partners. However, it may be unclear whether you should file for bankruptcy before your divorce or after. While there are benefits to each choice, filing bankruptcy and wiping out your debt before you divorce is often the best solution.

When you file bankruptcy before the breakup of your marriage, you wipe out all of your debts. Once the bankruptcy filing has been completed, you can start your divorce with no lingering debts which will make the apportionment of the assets and debts easier. The divorce process becomes easier and much faster when there’s no debts or financial obligations to squabble over. Another advantage is you may have an easier time qualifying for Chapter 7 due to your larger household size if you file while still married.

Seriously?

The divorce decree may set forth which spouse is liable for a debt and/or that a certain debt is to be paid by the other spouse. These determinations aren’t necessarily aligned with who is actually liable for the debt. These divorce order arrangements can blur the lines in bankruptcy and may only be dischargeable under the aegis of bankruptcy.

In addition, most clients want to be divorced as early as possible and do not want to wait for a bankruptcy proceeding to file for divorce. A divorce with substantial debt division will take longer than one without and if either spouse files for bankruptcy during the divorce, the divorce process will come to a halt. Petitioners for bankruptcy aren’t in charge of their debts or assets until the bankruptcy is finalized so the divorce court cannot move forward.

If the unhappy couple owes a large deal of shared debt, filing for bankruptcy jointly is a good option. This can even simplify the divorce settlement. Filing bankruptcy jointly is cheaper. If you’re a spiteful ex, filing individually for bankruptcy is one way to send the creditors after your spouse.

As you can see, there is no ‘right’ answer for every situation. Each couple and each individual must do what is good for their particular needs. While the benefits of handling financial issues and filing for bankruptcy before divorce far outweigh those of waiting, it is always best to consult your attorney before taking the first step. A competent legal professional can analyze your situation and i’ll give you the best advice for you. They can also guide you through the process, no matter which option you choose.

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