Do you need to file for bankruptcy protection and get a divorce? One of the most difficult parts of managing these two necessities is to decide the timing of each. Should you file bankruptcy before, during, or after your divorce? The answer varies, in fact, and may surprise you. To help you and your spouse find the best way to navigate both divorce and bankruptcy, here are the pros and cons of each choice.
Should You Claim Bankruptcy Before Divorce?
Waiting to file for divorce until after bankruptcy can accomplish two positive things. First, it may make things simpler and less costly if both spouses need to claim bankruptcy. This is because you usually have the option of filing jointly as a couple. Doing so can mean only one fee, one case, and one set of paperwork.
In addition, bankruptcy before divorce might make your divorce case go more smoothly. You can remove old debts, back taxes, or personal loan obligations from the divorce equation. The division of your assets is likely to be made easier without these factors. It could avoid additional arguments and may even save money on the divorce fees.
Should You File Bankruptcy During Divorce?
When it comes to divorce and bankruptcy, one easy answer is that you should avoid pursuing both at the same time. Divorce and bankruptcy are both complex legal matters that require your full attention. Trying to navigate them at the same time will be difficult and stressful. And each will be affected by the other's ongoing deliberations. While it may not always be possible to prevent, this should be a last resort.
Should You Divorce Before Bankruptcy?
Many people opt to complete their divorce before filing individual bankruptcy. As a result of the divorce negotiations, you will have all your numbers in hand and know your true financial picture. As a bonus, if you want to pursue a Chapter 13 repayment plan, doing so as a single-income household may lower your payments.
Post-divorce bankruptcy also limits the effects between ex-spouses. Your debts and assets are in one name and won't intermingle with your ex-spouse's. You also won't have to discuss sensitive or personal financial matters with your ex. Finally, it's a way to get a fresh start once you've started your new post-divorce life.
Clearly, the timing of divorce and bankruptcy can be tricky. Ensure that you choose the right moments for each by working with experienced legal help. Talk to a divorce attorney today to learn the pros and cons of bankruptcy timing in your particular divorce.
