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Should I File Bankruptcy After Divorce?

Posted By Cairns Law Offices || 15-Jan-2018

It’s no secret that money problems have a tendency to strain a marriage and when things get grim, finances can drive a couple apart, leading to divorce. At Cairns Law Offices, we specialize in low-cost, no-fault divorces; therefore, we help a fair share of people who are having financial problems and simply cannot afford a costly divorce.

Because of our unique “niche,” we have seen firsthand how debt leads to bankruptcy and divorce. That being said, we often have clients as us, “Should I file bankruptcy before or after the divorce?” While the right answer depends on the individual circumstances, in many cases it’s wiser to file bankruptcy BEFORE the divorce.

Benefits of Filing Bankruptcy First

Let’s take a closer look at some of the key reasons why it makes financial sense to file bankruptcy jointly before filing for divorce:

  • Filing bankruptcy jointly is cheaper than filing two separate bankruptcies after a divorce. When you file together while married, there’s usually only one attorney fee, one set of papers and schedules and one Meeting of Creditors.
  • When you file bankruptcy before divorce, you are no longer liable for joint debt incurred during the marriage. If you file divorce first, the later bankruptcy filing may be pointless. If you agree to pay any joint debts in full and you later file bankruptcy, it will relieve your liability, but it won’t eliminate your former spouse’s liability. You could be forced to pay the debt or reimburse your former spouse if he or she is forced to pay it.
  • If your spouse files an individual bankruptcy case before or during the divorce and you don’t join him or her, you can be saddled with all of the joint debt.
  • When you file bankruptcy jointly while still married, it makes the settlement process easier and less stressful.

Though it usually makes sense to file bankruptcy before a divorce, that’s not always the case. Sometimes, spouses do not qualify to file a Chapter 7 bankruptcy because combined, their income is too high. In such situations, it may make more sense for the spouses to file bankruptcy individually after the divorce.

Looking for a divorce attorney in Pennsylvania? Contact us today to learn how to obtain a no-fault divorce for just $219!