Bankruptcy and divorce present a complex intersection of the law and it important to understand how one effects the other. Although tensions may be running high when a couple decide to divorce, it is in your and your spouse’s best interest to cooperate to resolve debt issues prior to concluding a divorce, whether that means deciding to file for bankruptcy before or after the divorce, and whether to file bankruptcy separately or jointly.
One of the biggest factors in deciding whether to file bankruptcy before or after the divorce is what type of bankruptcy you wish to file. A simple Chapter 7 bankruptcy can be filed and completed in a matter of months – one spouse can file separately or both can file jointly to discharge debt.
Chapter 7 bankruptcy is typically a good fit for couples with few assets carrying sizable unsecured debt such as credit cards or medical bills they want to discharge (liquidate). Although it is possible to file for Chapter 7 bankruptcy either separately or jointly during the marriage, the latter of which could save you money on filing and attorney fees, some wait until after a divorce when their household income is less in order to qualify for the Chapter 7 bankruptcy means test. It is also worth noting that filing jointly may entitle you to more bankruptcy exemptions than filing separately.
Before deciding to file bankruptcy, it is important to work with a bankruptcy attorney who can help you decide which approach is in your mutual best interests. It is often helpful to work with an attorney or law firm that practices both in bankruptcy and family law. The division of marital assets and marital debt and whether it is best to file bankruptcy before or after divorce demands a comprehensive understanding of both areas of law.
Deciding Whether to File Bankruptcy Before or After Your Divorce?
Contact Experienced Waukesha Bankruptcy and Divorce Attorneys
The attorneys of The Law Offices of Andrew C. Ladd have over three decades of experience helping hundreds clients in Waukesha county resolve their entire bankruptcy and divorce matters, not just part of it. You will never be handed off to another attorney or law firm – we will explain the bankruptcy and divorce process in detail and what you can expect going forward to come out in the best possible financial shape. Call 262-542-3900 or contact us online to schedule a free consultation.