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West Palm Beach Bankruptcy & Business Attorneys > > Bankruptcy Attorneys > Divorce and Bankruptcy: Which Comes First?

Divorce and Bankruptcy: Which Comes First?


If you are thinking of a divorce, you may also be thinking about a bankruptcy. Often, the two accompany each other. Sometimes finances were a problem during the marriage and lead to problems during the marriage. Other times, the divorce itself causes financial problems, what with two incomes combined now becoming one or one income for each spouse.

If you think bankruptcy may be an option that you would like to consider, you should also think about whether to file before or after your divorce.

Filing Before the Divorce

There are a few considerations when considering filing for bankruptcy before or after your divorce.

Remember that during your bankruptcy, all of your finances, assets, income, possible future income, debt and liabilities must be disclosed. For spouses that are uncomfortable doing that, or who feel (or have been advised) that doing so could cause a problem in their divorce, this may be a consideration (although most of your finances are discoverable in a contested divorce anyway).

What Chapter?

It is also important to give thought to what chapter bankruptcy you would be filing. For a simple Chapter 7, with little or no assets, the bankruptcy can be over in just a few months. However, if you are filing for Chapter 13, where there is a 3 to 5 year plan involved, you may want to wait until after your divirce to file. If you file beforehand, have a plan approved, and then divorce in the middle of your plan, you may have to go back to court to modify your plan.

In some cases, you may not make enough money on your own to qualify for a Chapter 13 and thus keep paying on your previously established plan.

Of course, the opposite can be a problem also if you are filing for Chapter 7. In some cases, if the bankruptcy is joint, the joint incomes of a husband and wife are too high for a Chapter 7 bankruptcy. After a divorce, one spouse alone may not make as much and thus may qualify for the Chapter 7.

Your Exemptions

As a married couple filing for bankruptcy, you generally receive twice the exemption amounts. Thus, if you had a $4,000 personal property exemption on your own, you would get to keep $8,000 worth of property by filing jointly.

Personal Matters

Most bankruptcies go on without any problem. But you may want to consider your relationship with your spouse. Will they be cooperative if you need documents or information? Will they be more cooperative before or after your divorce?

You should also consider whether wiping out debt in bankruptcy before your divorce will reduce the fighting in the divorce itself. It may make sense to eliminate debt, and thus not have to argue over who pays what during your divorce.

We can help you manage the personal issues that can come up in a bankruptcy. Call the West Palm Beach bankruptcy lawyers at Kelley Kaplan & Eller at 561-264-6850 for bankruptcy help.


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