For some people, bankruptcy leads to divorce and vice versa. Dealing with both at the same time may seem like an impossibility but there are tricks you can use to make both go a bit smoother. Before you file for either, consider these situations and decide which is the best option for your situation.

What Should You File Bankruptcy or Divorce First?

This is a very common question for people who are facing both divorce and bankruptcy. There is no “one size fits all” method but taking a look at some different components can help you decide which one is best. You can save money on your bankruptcy filing by filing together and if you are using an attorney, you can save even more. Another benefit of filing for bankruptcy prior to filing for divorce is that you can lower your divorce costs by simplifying your debt and property division during the bankruptcy. One caveat is that some bankruptcy attorney’s will not represent both parties of a bankruptcy if the divorce is coming shortly after. If you are using a bankruptcy attorney, consult with them first before doing anything.what to know about going through divorce and Bankruptcy

Which Type of Bankruptcy Are Your Filing?

Depending on the type of bankruptcy you have chosen to file, it might make more sense to file separately. With Chapter 7 bankruptcy, it is more of a liquidation and you get to remove unsecured debts such as credit card debt or medical bills. This type of bankruptcy takes a few months, usually, to go through so you can be done with the bankruptcy before your divorce is finalized, in many cases. if you choose Chapter 13 bankruptcy, you may want to file separately because it can last anywhere from 3 to 5 years, long after any divorce is finalized. Wit this type of bankruptcy, a repayment plan is put into place and it is designed for you to pay back some or all of the debt. Since it takes longer to complete, it is not a good idea to file together if you plan on filing for this type. Additionally, if you both want to file different types of bankruptcy, you cannot file together.

Bankruptcy and Divorce At The Same Time

Filing for divorce or bankruptcy is very difficult but is even worse when you have to file for both. Contact us at Clark & Washington for assistance with your bankruptcy filing or for more advice for your situation.