Which First, Divorce or Bankruptcy?

 Posted on September 29, 2013 in Chapter 7 bankruptcy

Money is a major source of tension for any marriage.  It may not be the cause of a divorce but financial arguments can add to the stress on any couple.  Especially if that pressure is compounded by bills that are not being paid and calls from creditors.  As much as financial troubles can be the cause of divorce, divorce can also be the cause of bankruptcy.

Given this close relationship to two of the most stressful events that might occur in life, it is important to plan ahead.  The first consideration is which you should do first, file for divorce or for bankruptcy.

The fees for filing for bankruptcy are the same regardless if you apply separately or together.  That means you can potentially save money if you file with your soon to be ex-spouse.  It should be mentioned to your bankruptcy attorney that you will divorce soon, that way there is no conflict of interest.

The next step is to consider what type of bankruptcy to file for, Chapter 7 or Chapter 13.  Since a Chapter 7 bankruptcy means that you sell your property and assets to repay your debts.  This is an easy and quick bankruptcy to complete before divorcing your partner.  Chapter 13 is a long term repayment program.  This would be difficult to complete without your spouse in the same household.  A Chapter 13 bankruptcy should be filed individually after the divorce is finalized.

If you need a restart financially, it makes more sense to file for bankruptcy before filing for divorce.  One of the major sticking points in divorce is the division of property.  By filing jointly, you may be eligible for more exemptions because you are still married.  But assets are not the only thing that gets divided, but debts do too.  If you are looking for a new start both in your finances and your love life, then contact a knowledgeable bankruptcy attorney in San Antonio today.