When considering whether to file for bankruptcy or to divorce first, there are some initial decisions to consider by yourself and some more complicated issues that you may want to discuss with a qualified attorney. Before you are divorced, you and your spouse are eligible to file bankruptcy jointly. As a joint bankruptcy typically costs the same as an individual bankruptcy, it may be more cost effective to file a joint bankruptcy. Therefore, you should determine whether your spouse is considering bankruptcy as well. If so, you should also consider whether your spouse will be cooperative throughout the bankruptcy and whether you will be able to delay your divorce if necessary.
Beyond those simple issues, more complicated issues arise when you begin to analyze your assets and income in terms of bankruptcy. For those couples with high joint income or many assets, a Chapter 7 bankruptcy may not be feasible. Therefore, you would need to consider Chapter 13 bankruptcy. Given that a Chapter 13 bankruptcy lasts for three to five years, you would have to consider whether you could handle being in a bankruptcy with your ex-spouse for such an extended period of time.
Some individuals who do not qualify for a Chapter 7 bankruptcy while married may qualify for a Chapter 7 bankruptcy after they are divorced. Also, a Chapter 13 bankruptcy may be more attractive after a divorce rather than before. The important thing to remember about filing for bankruptcy after a divorce is that debts arising out of the divorce (attorneys’ fees, child support, alimony, etc.) cannot be discharged in the bankruptcy. Furthermore, the allocation of debts between spouses creates new obligations on those debts and prevents them from being discharged unless both spouses file for bankruptcy. For these reasons, anyone considering a bankruptcy and a divorce will want to talk to experienced attorneys for each issue. Finding a firm with attorneys who specialize in both can help alleviate some of the stress involved in approaching each of these options because the attorneys will be able to work together to figure out which option is best for you.
Tyler A. Moore is an associate at Daniels & Taylor PC, a law firm in Georgia. Serving the Gwinnett and Walton County areas, the attorneys at Daniels & Taylor offer full-service, sensitive and sophisticated legal representation based on values of professionalism, integrity and ethics in the practice of family law. Visit their firm website and profile.