Bankruptcy And Divorce: Determining Which One You Should File First

Posted on: 12 June 2015

A life crisis seems to come out of nowhere. Dealing with a single issue is troubling, but when you're dealing with two major life issues at one time, it can all seem overwhelming. If you are an individual dealing with a pending divorce and bankruptcy, you understand this firsthand. When you find yourself in this type of situation, it can be challenging trying to determine if you should file for divorce or bankruptcy first. While there is no clear answer, there are a few things to consider that can lead you in the right direction.

Cost Concerns

If both you and your soon to be ex are considering bankruptcy and coming up with the money to file for bankruptcy is an issue, you might want to consider filing for bankruptcy before you file for divorce. The reason for this is that filing costs for bankruptcy are the same for individual and joint applicants.

Filing together gives you and the other individual the opportunity to share the filing and court costs that come along with bankruptcy. Even if you should file for divorce shortly after filing for bankruptcy, the filing cost will remain the same.

Type of Bankruptcy

The most important factor you want to consider is what type of bankruptcy both you and the other individual plan to file, such as Chapter 7 or 13. The reason this is so important is that the time it takes to complete the bankruptcy process is quite different depending on what route you take.

Chapter 7 typically takes about six months to finish, while Chapter 13 can take years to complete depending on the payment plan you create. If you're filing Chapter 13, it might be better to get your divorce completed first.

Debt Load

The debt load you and your partner share should also have an influence on whether or not you should file for bankruptcy or divorce first. In the simplest of terms, the higher the debt load, the more you should consider filing for bankruptcy first. The seemingly never ending process of back and forth, trying to determine which spouse is responsible for which debts can lead to costly litigation during divorce.

Filing for bankruptcy first allows you and the individual to come up with a plan for your debts beforehand, such as discharge or payment plan. When you do file for divorce, this is one less task you two have to complete.

Make sure an experienced bankruptcy attorney, like Thomas A Blake, is your primary point of reference concerning your bankruptcy. Your attorney will be able to assess your current situation to help you make a decision that will be best for you today, tomorrow and well into the future.