Divorce brings a myriad of changes in a person’s life. One of those changes is often a bankruptcy filing, which leads to a common question. 

Should I File Bankruptcy Before Or After My Divorce Proceeding?

Some people do not have a choice whether to file bankruptcy before or after the divorce proceeding. If you can make these decisions and plan ahead, though, it is possible that your bankruptcy filing and divorce proceedings will turn out less complicated in the end.

Most people who file bankruptcy are worried about how much it will cost when the bankruptcy filing has concluded. Typically, if you file bankruptcy before you get divorced, costs will be diminished greatly. It does not matter if you file for bankruptcy individually or jointly; the filing costs of bankruptcy will be the same. If you and your spouse have a lot of debt combined, it is usually a good idea to file jointly
 
Retaining a bankruptcy lawyer should lower your costs. If you choose to file bankruptcy together with your spouse and you hire one lawyer for the filing, rather than each spouse retaining separate attorneys, you can keep costs as low as possible.

Your lawyer can help you consider your options. If you qualify to file a Chapter 7 bankruptcy, which is also known as liquidation bankruptcy, it will quickly get rid of your unsecured debts. Chapter 7 bankruptcy can be completed, from the initial filing to the final discharge, within a few months. Unfortunately, if you and your spouse’s combined income is too high, you may not qualify to file a Chapter 7 bankruptcy.  

Chapter 13 bankruptcy, on the other hand, results in a repayment plan that you and your spouse will be required to pay within three to five years. While there is not an income threshold in Chapter 13 bankruptcy like there is in Chapter 7 bankruptcy, your income will still determine how much of your debts you will repay. A Chapter 13 bankruptcy filing might complicate a divorce since the two of you probably will not want to be required to make joint payments monthly for the next three to five years. 
You should understand that all of your property is essentially frozen during a bankruptcy filing, so if you file a bankruptcy petition before you get divorced, none of your property or assets will be divisible until after the bankruptcy filing is complete. 

When you file for Chapter 7 bankruptcy, the majority of your debts are wiped out. This makes the entire process easier when assets and financial obligations are divided during the divorce proceeding, Additionally, this process should be less expensive because there will be fewer debts and property to discuss. 

As a final note, be sure to disclose your impending divorce to your bankruptcy lawyer immediately to ensure that complications are minimized. Your lawyer can ascertain whether any conflicts of interest could arise. If you have an impending divorce and you are not sure whether to file bankruptcy before or after the divorce, you should discuss your situation with an experienced bankruptcy lawyer.  

Are You Considering Filing For Bankruptcy?

If you feel bankruptcy is the best option for your financial situation you need to speak with an experienced bankruptcy lawyer as soon as possible. Please contact us online or call our office directly at 888.348.2616 to schedule your free consultation.

James Roswold
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James Roswold is a Kansas & Missouri personal injury, workers comp, and medical malpractice attorney.