Just as we never think that we will ever require a divorce in the future, many believe that they will never have to make the tough decision to file for bankruptcy. However, as millions of Americans learn as they navigate their lives, unexpected events can take place, people can change, and unforeseen incidents can put you on paths that you never thought you would take. In some cases, these paths involve divorce and bankruptcy.
Sadly, it makes sense that divorce and bankruptcy often go hand in hand. Money problems and financial issues can wreck havoc on even the happiest and most stable marriages and disagreements and stress related to finances is the most common reason that divorces happen. It is common that instead of dividing assets in the courtroom, many couples are trying to solve the problem of their shared debts. While some look to file for bankruptcy with their spouse before the divorce, others opt to file for bankruptcy in the months after their divorce is finalized.
Many attorneys agree that filing bankruptcy before divorce makes the most sense for the majority of couples. Not only will filing for a joint bankruptcy be less expensive than filing two separate bankruptcies, getting bankruptcy out of the way before divorce proceedings can often simplify the division of debts and assets. However, filing for bankruptcy before divorce requires that you and your spouse agree about declaring bankruptcy and can work together throughout the bankruptcy process.
As always, it is best to speak to a bankruptcy attorney and a divorce lawyer about the specifics of your own case before moving forward with a plan.
Also, remember that bankruptcy will not get rid of all of your money problems in the wake of a divorce. For example, you cannot erase child support, alimony, or student loan debts in a bankruptcy. In addition bankruptcy will have a significant affect on your credit score for at least several years – an issue that may make it more difficult for you to take out loans.