If financial problems have contributed to the breakdown of your marriage, you’re certainly not alone. Financial stressors like job loss and debt are among the leading causes of divorce.
If your future looks like it’s going to include both bankruptcy and divorce, you’ll be dealing with two of the most difficult and emotional challenges you’ll likely ever face in your life. That means you need to take some time to think clearly about the best way to handle them.
How do you determine whether to tackle bankruptcy or divorce first?
So should you file for bankruptcy or divorce first? There’s no one right answer for everyone. You probably won’t go through divorce and bankruptcy simultaneously. Typically, if there’s a divorce in progress, bankruptcy courts will suspend an individual’s or couple’s bankruptcy case until the divorce is final and the division of assets and debts is decided.
If you and your spouse have considerable marital debt, you may be able to get rid of a significant amount of that debt if you file for bankruptcy first. That will give you less debt to divide as part of the divorce. If you’re able to work together to file a joint bankruptcy, that can cost you less than filing individually.
If you’re hoping to qualify for Chapter 7 bankruptcy, it might be easier to do so if you wait until after the divorce and then file separately. To qualify for Chapter 7, your income has to be below the state’s median. It’s a good idea to run the numbers and determine whether you’d qualify while you’re still married and, if not, if you’d qualify on your own after the divorce.
When you’re not sure what step to take next, get some guidance
It’s a lot to think about, and it can feel overwhelming. It’s wise to consult with both a bankruptcy and family law attorney to determine what’s best for your own unique situation.