Many folks point to divorce as their major reason and cause that leads to filing bankruptcy. But even so, it is not always something that can be planned ahead. If there is time to carefully review the situation, planning ahead can be very beneficial to making sure that you get the best possible outcome from a bankruptcy filing. It can do much to help both the divorce itself as well as the bankruptcy much simpler and also much more affordable.
If you file chapter 7 bankruptcy or chapter 13 bankruptcy prior or during a divorce, or even in situations where you file the bankruptcy after filing divorce, the debt will be discharged if it is allowable. The type of filing (ch 7 or 13) also comes into play. If filing a chapter 7, and you and you are still married, if it’s possible, filing the bankruptcy jointly can save money because you can pay the same fees to file jointly as to file separately.
Bankruptcy Costs & Costs of Filing Divorce
Bankruptcy attorney fees as well as court fees run the same amount whether filing jointly or individually as mentioned above. Hence filing a bankruptcy together with a spouse prior to divorce could end up saving you and/or your spouse much in court fees if you can stand to do it together. Additionally, if deciding to retain a bankruptcy lawyer, the legal fees likely will be significantly lower when filing jointly. However, it is wise to seek the advice of your bankruptcy lawyer know regarding the looming divorce due to any potential for having a conflict legal interest in representation for both you and your current spouse. This is specifically an issue in situations where there is any potential for a big fight in the divorce.
One benefit of bankruptcy during a divorce is that it services in many cases to simplify debt and financial issues as well as the division of property.