Filing For Divorce And Bankruptcy At The Same Time?
If you are facing divorce and bankruptcy, which should you file first? The answer depends upon your particular situation. One situation in which you may want to file for bankruptcy first is where most of your debt is joint debt, you should file the bankruptcy petition first, wiping out all joint debt. This will save you money by only filing for one petition and only paying for one filing fee; it will also eliminate the issue of division of debt in your upcoming divorce; one less issue to be argued over.
On the other hand, you may want to wait until you and your spouse have divorced if your combined income will put you over the threshold for qualifying for filing a chapter 7.
It is important to know that there are certain “debts” that bankruptcy law will not allow you to discharge. These include payments for child support and alimony. In this scenario, the timing of the bankruptcy with respect to the divorce is irrelevant. However, if money is owed by one spouse to another for a buy-out of marital assets, the argument can be made that the spouse is a “creditor” and the money owed to the spouse for the buy-out can be discharged.
As you can see, there are many different scenarios. It is best to seek the advice of legal counsel before taking any action in filing as the facts of your case will dictate which course of action to follow.