Should you file for bankruptcy before or after filing for divorce?

Filing for divorce is a difficult and painful decision that many couples face. Most couples state financial reasons for filing for divorce, so it’s not uncommon for one or both spouses to file for bankruptcy either before or after a divorce. But is it better to file for bankruptcy before filing for divorce or after?

There are a few things to consider in both cases and it’s important to know the differences between Chapter 7 and Chapter 13 bankruptcy. With a Chapter 7 bankruptcy, your assets are liquidated in an effort to eliminate your unsecured debt, such as credit cards and medical bills. These debts are discharged rather quickly and can be done before a divorce. With a Chapter 13 bankruptcy, you agree to pay back some or all of your debts over a period of time through a repayment plan usually three to five years. Since this form of bankruptcy takes longer, it might be a better option to complete after the divorce.

If you are able to file for a Chapter 7 bankruptcy and eliminate your debts prior to filing for divorce, it does simplify the divorce proceedings when it comes to dividing property and assets and is probably your best option. But there are some things to consider about how it affects the spouse that is not filing for bankruptcy.

If one spouse files for Chapter 7 bankruptcy, and their obligation to pay a joint credit card has been eliminated, the other spouse is not relieved of their obligation to pay the balance of the debt. Therefore, during the divorce proceedings, the other spouse’s accumulated debt as a result of the first spouse’s bankruptcy could result in affecting the division of joint property or spousal support.

If you feel that bankruptcy may be your best alternative, please call the associates at Adams and Associates, PA at 1-888-724-9860 for a free consultation and we will discuss your options with you.Filing for divorce is a difficult and painful decision that many couples face. Most couples state financial reasons for filing for divorce, so it’s not uncommon for one or both spouses to file for bankruptcy either before or after a divorce. But is it better to file for bankruptcy before filing for divorce or after?

There are a few things to consider in both cases and it’s important to know the differences between Chapter 7 and Chapter 13 bankruptcy. With a Chapter 7 bankruptcy, your assets are liquidated in an effort to eliminate your unsecured debt, such as credit cards and medical bills. These debts are discharged rather quickly and can be done before a divorce. With a Chapter 13 bankruptcy, you agree to pay back some or all of your debts over a period of time through a repayment plan usually three to five years. Since this form of bankruptcy takes longer, it might be a better option to complete after the divorce.

If you are able to file for a Chapter 7 bankruptcy and eliminate your debts prior to filing for divorce, it does simplify the divorce proceedings when it comes to dividing property and assets and is probably your best option. But there are some things to consider about how it affects the spouse that is not filing for bankruptcy.

If one spouse files for Chapter 7 bankruptcy, and their obligation to pay a joint credit card has been eliminated, the other spouse is not relieved of their obligation to pay the balance of the debt. Therefore, during the divorce proceedings, the other spouse’s accumulated debt as a result of the first spouse’s bankruptcy could result in affecting the division of joint property or spousal support.

If you feel that bankruptcy may be your best alternative, please call the associates at Adams and Associates, PA at 1-888-724-9860 for a free consultation and we will discuss your options with you.