There is no doubt that worrying about your finances can have an adverse effect on your marriage. Since both situations are quite serious and have repercussions in all aspects of your life, it makes sense to strategize whether to file for bankruptcy or divorce first.
Below is some important information for anyone contemplating filing for both bankruptcy and divorce.
When filing for bankruptcy first makes sense
Some couples find they are able to divorce and remain civil. If your marriage falls into that category, you may want to file for bankruptcy before filing for divorce. Since this requires cooperation between the couple, this is only possible for those whose divorces are relatively free of acrimony.
Both parties can benefit financially from this decision. They will only have one set of attorneys’ fees, filing fees and other court costs. Also, they may both be able to file under Chapter 13 by doing so as a couple rather than separately.
When it would be better to file for divorce first
If you and your soon-to-be ex-spouse can’t agree on anything (except you no longer want to be married to one another), filing for divorce first can be a better strategy. Another reason for this order preference is that, because bankruptcy at least temporarily dings everyone’s credit, delaying bankruptcy can allow you to start over again with your credit score more or less intact.
Learn more about your options
Remember, knowledge is power. If you are facing filing for bankruptcy and divorce, learning more about the state laws and the bankruptcy code can help you find a path forward.