File Divorce Before Bankruptcy or Vice Versa?

Unfortunately, divorce and bankruptcy seem to go hand-in-hand. Financial stress is a leading contributor to many divorces. If you are facing this situation, you are likely wondering if you should file bankruptcy before you file for divorce or vice-versa. The answer depends on your unique situation.

If you and your spouse are in a highly adversarial place in your relationship, it may be impossible for you to file a bankruptcy case before your divorce. A bankruptcy requires open communication and complete financial disclosures, so many couples are unable to move past their personal differences in order to work together in their bankruptcy filing. Also, if you suspect that your spouse is hiding assets, you should seek legal help to protect yourself.

If, however, you and your spouse are amicable, you may want to consider filing bankruptcy before you divorce. It is important to understand that your divorce agreement will be binding on you and your spouse, but not upon your creditors. Thus, since most debts incurred during your marriage are joint debts (both spouses are liable to pay them), if your ex fails to pay a debt that he/she agreed to pay in the divorce settlement, you can still be held responsible by the creditor to pay the debt. Additionally, if your ex-spouse files for bankruptcy protection after the divorce and you do not, you may be held liable for all of the debt.

A bankruptcy filing is binding on both spouses and upon all their creditors. It is one of the most comprehensive means for dealing with debt, which can make the divorce process more straightforward.

Whatever your situation, it is wise to confer with an experienced lawyer and learn more about your available options. If you have questions regarding filing for bankruptcy protection, contact us for a free consultation.


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