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Is it best to file for bankruptcy before or after divorce?

On Behalf of | Jun 20, 2024 | Bankruptcy

When your marriage is on the rocks and your financial situation is in disarray, deciding whether to file for bankruptcy before divorce or the other way around can be a tough decision. Given the implications on your financial future, it helps to make the right call.

Every case is different, and there is no one-size-fits-all answer to this. It all comes down to the unique aspects of your financial situation and the dynamics of your divorce. Here is what you need to know to make an informed decision that best suits your circumstances.

Filing before divorce

You may want to file for bankruptcy before divorce if you and your spouse have significant joint debt. It could reduce financial strain during and after divorce since most debts may be discharged. Addressing debt issues before the divorce can also streamline the division of assets and debts and simplify the divorce process.

It could also be cheaper if you are jointly filing for bankruptcy. You may split the ensuing bankruptcy fees and legal costs, which can be a financial relief during an already costly divorce process.

Filing after divorce

Filing for bankruptcy post-divorce may be ideal if you are doing so on your own and not jointly as a couple. It allows you to deal with your financial situation without involving your ex. Handling one major life event at a time can also reduce the stress and emotional burden involved.

Other factors to consider

It’s equally important to factor in your long-term financial goals and how the timing of your bankruptcy may impact them. Your choice of bankruptcy also matters; Chapter 7 bankruptcy is quicker and could be finalized before divorce, while Chapter 13 is a longer process that could extend well into your post-divorce life. 

Reaching out for qualified and personalized guidance can help you make the right decision and protect your financial interests.