Our Bankruptcy Blog

Should I File Bankruptcy Before or After Divorce?

Getting a divorce is a stressful and painful process that is only made more difficult when coupled with ongoing financial problems. It’s crucial that you understand how bankruptcy and divorce are affected by one another as you decide which options are best for you. One issue of importance is the timing of bankruptcy filing relative to divorce. Below, we’ll examine a few factors worth considering when deciding if it’s best to begin the bankruptcy process before or after a divorce.

Bankruptcy Type

The type of bankruptcy you want to file is one of the most significant determining factors in deciding when to file bankruptcy. If your bankruptcy is a simple Chapter 7 bankruptcy, then filing it before your divorce may be the best option.

Since Chapter 7 bankruptcy can be filed and completed in a matter of months, it makes sense for you and your spouse to file jointly, discharge your debts, then move forward with divorce afterward. In contrast, Chapter 13 bankruptcy lasts three to five years, therefore filing before or after divorce would be evaluated to determine what is best for the parties involved.

Household Income Level

Your household income is another essential factor in considering bankruptcy and divorce. Filing joint bankruptcy with your spouse means that you’ll save money on fees and costs (and in some states, you may also be allowed to double the amount of exempt property). However, depending on your joint income, it could be advantageous to file separately after the divorce- mainly if your income level makes you ineligible for Chapter 7.

Relationship Quality

Your relationship with your spouse must be considered when dealing with bankruptcy and divorce. Because your spouse would need to cooperate with your attorney, attend court procedures, and provide financial documents, it’s essential to consider whether you feel confident that they will assist.

If you are on amicable terms with your spouse, it will make the process of filing before a divorce much more manageable. However, if you have a contentious relationship, and your spouse is likely to act detrimentally to your financial interests, it may be more beneficial to file afterward.

Parker & DuFresne

Deciding to file for bankruptcy or divorce is difficult and painful- and it’s vital to have the legal guidance of an attorney that you trust. At Parker & DuFresne, we specialize in both bankruptcy and family law, and through a thorough consultation, we’ll help you determine which solutions are right for you. Contact us today to learn more!

Parker and DuFresne

Parker and DuFresne