Money problems can make it impossible for you to tolerate your spouse any longer. Many couples that decide to get divorced also need to consider whether to file for bankruptcy or not. If you and your spouse are both interested in filing for bankruptcy, it is often easier to file for bankruptcy together before you file for a divorce. You can work together in the bankruptcy, figuring out if there is anything left for the two of you to divide up. Once the bankruptcy is complete, you can move on to filing for a divorce and it will be easier. If you file a bankruptcy and a divorce at the same time, the process for each becomes complicated.
When Only One Party Wants to File for Bankruptcy
If you are the spouse that wants to file for bankruptcy while your spouse doesn't, you will want to wait until your divorce is finished. As you divide up marital debt, try to secure the debt that can be discharged in a bankruptcy, while your ex takes responsibility for marital debt that can't. Credit cards can be written off, while back taxes can't be. It could be a negotiation point for you to take on additional unsecured debt in trade for a higher percentage of assets you might own.
Figuring Out What Debt Is Yours
Marital debt is debt that is accrued together, during the course of the marriage. If your ex has credit cards you didn't know about, or a car loan only in their name, this is debt that is their own responsibility. Know what debt you are going to be held accountable for, and only take on the debt you have to. Debt is divided up either in half, or in a way that is deemed fair, depending on whether you live in a common property state or equitable distribution one.
Filing for Bankruptcy Together
If you file for bankruptcy together, you pay one fee. This gives you the ability to take a hard look at your marital debts, figure out what can be discharged, and puts you both in a relatively equal position financially. Even when you no longer want to stay married, filing bankruptcy together for the sake of both of your financial futures can be beneficial.
Know when to file for bankruptcy when you are also going to file a divorce. A bankruptcy attorney will walk you through the process of filing for bankruptcy, either before or after you file for divorce.
