You know that your financial situation isn’t great, but you’re not sure if you should go into bankruptcy. Right now, you’re already working on divorcing your spouse, and you don’t know that you want to have two major changes happening at once.
Before you get too worried about it, remember that it’s not likely that you will be able to do both things at the same time. During a divorce, your assets could be locked down. The same is true during a bankruptcy.
Instead of trying to manage both at once, you might consider filing bankruptcy before or after your divorce. Which is better? That depends on your specific situation.
Filing for bankruptcy before divorce
Filing for bankruptcy before divorce is a good idea if you want to cancel joint marital debts. For example, if your spouse created a lot of debt on shared accounts, you may want to go into bankruptcy before divorce to make sure those are eliminated.
Going through a bankruptcy with your spouse will require that you are cooperative, so if you plan to do so, it may be a good idea to complete the bankruptcy prior to suggesting a divorce.
Filing bankruptcy after divorce
In some cases, it makes more sense to file for bankruptcy after you get divorced. For example, if your debts are only in your name or if you would qualify for Chapter 7 bankruptcy as a single person rather than Chapter 13, then you may want to consider filing after your divorce. It might also make sense if you don’t yet know which debts you’ll end up with after you divorce. It’s a smart choice to talk to your attorney about what would be better in your circumstances, since your income and assets will impact whether or not a bankruptcy is right for you and when it’s better to file for it.
Getting a divorce is tough, and going through bankruptcy is, too. Usually, it’s not a good idea to tackle both of these stressful situations at the same time. Instead, sit down and work out which arrangement will leave you in a better financial position after divorce, which is what your goal should be in the end.