Given the fact that money problems is often one of the leading causes for divorce, planning well ahead of time will ensure that both the procedures are carried out in a simple and cost-effective manner. However, deciding whether you should file for a divorce before bankruptcy or vice versa will largely depend on several factors, including your state of residence, the amount of assets you possess and the type of bankruptcy you wish to file. Here is all you need to know about bankruptcy and divorce.
Bankruptcy and divorce
- Since both the individual and joint filing fees for filing a bankruptcy are the same, filing a petition with your spouse before a divorce will save you a lot in terms of court fees. In addition to this, if you plan to hire a bankruptcy attorney, the fees is likely to be lower for a joint bankruptcy. If you file a bankruptcy before a divorce, it would greatly simplify the property distribution process and save major bucks on your divorce lawsuit.
- Another aspect that you need to consider is the type of bankruptcy that you plan to file. For instance, while you can get over with your chapter 7 within a few months, a chapter 13 will typically last for up to five years. This implies that if you plan to file chapter 7, you can get rid of all your debt within a few months and therefore file a petition before your divorce. However, if you are planning for a chapter 13, you might want to wait it out and get your divorce first, since the former will take a long time to complete.
- When it comes to property division, a bankruptcy can help simplify the process to a great extent. If you live in a state wherein your exemptions can be doubled in case you file a joint bankruptcy, it will be a good idea to do so before you go ahead with your divorce litigation.