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Can Filing for Divorce When also Filing for Bankruptcy

Can Filing for Divorce When also Filing for Bankruptcy

As per Lawkidunya, Filing for bankruptcy during a divorce can delay the distribution of assets and liabilities until the bankruptcy is completed. In other words, you have to finish your bankruptcy before a divorce can be finished. As a result, there is no real way to “do them at the same time.”

Should I File Bankruptcy before or after my Divorce?
If your bankruptcy is a simple Chapter 7 bankruptcy, then filing it before your divorce may be the best option. Since Chapter 7 bankruptcy can be filed and complete in just several months, there’s no reason you and your spouse can’t file jointly, discharge your debts, then divorce afterwards.

What Happens if you Divorce During Bankruptcy?
Instead, you enter into a court-supervised plan to pay your creditors at least a portion of what you owe them. Chapter 13 repayment plans usually last three to five years. If you and your spouse have filed jointly for Chapter 13 protection, bankruptcy law can lock you together post-divorce, but you have some options.

Does filing Bankruptcy Affect your Spouse?
If you file for bankruptcy without your spouse, it will typically not affect your spouse’s credit. But if you have joint debts, the fact that you filed for bankruptcy to discharge the debt may appear on your spouse’s credit report.

Can you File Bankruptcy on Marital Debt?
If the court discharges a debt, a creditor can never recover the debt against you. If you will probably divorce, and your marital community has lots of debt, you can file for bankruptcy before filing for divorce. The bankruptcy can discharge some of the debt and make it easier to negotiate the division of the rest.

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