Notably, one of the leading causes of divorce among couples is financial issues or disagreements. In extreme scenarios, such financial issues or disagreements among couples can be about whether or not to file for bankruptcy. That said, couples who ultimately plan on filing for divorce may be unsure as to whether to file bankruptcy beforehand or afterward. Continue reading to learn if you and your spouse should file for bankruptcy or divorce first and how an experienced Rockland County bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq., can assist you in making this determination.
Should my spouse and I file for bankruptcy before filing for divorce?
If you and your spouse file for bankruptcy before filing for divorce, you will have to submit a joint petition. Specifically, this will contain the financial information of you and your spouse in a single set of documents.
Some would say that submitting a joint petition is more comprehensive than filing separately. Examples that point to this are as follows:
- It is less expensive to file for bankruptcy together as opposed to separately.
- It is less time-consuming to file for bankruptcy together as opposed to separately.
- Filing for bankruptcy together will discharge the qualifying debts of both you and your spouse, which will simplify the divorce terms settled in court (i.e., asset division).
- Filing for bankruptcy together will discharge the qualifying debts of both you and your spouse, which will restrict creditors from going after either or you to collect payment.
It is important to note that if you and your spouse on planning to file for a Chapter 7 bankruptcy, it is best that you handle this first. The reasoning is that Chapter 7 bankruptcy cases typically last only a few months, so it will not push off your divorce proceedings for too long. Plus, doing so beforehand can rid you and your spouse of your obligation to repay unsecured debts.
Should my spouse and I file for bankruptcy after filing for divorce?
While filing for a Chapter 7 bankruptcy before a divorce is recommended, this is not the case for a Chapter 13 bankruptcy. This is because a Chapter 13 bankruptcy involves you and your spouse entering into a repayment agreement that can last anywhere between three to five years versus just a few months with a Chapter 7 bankruptcy. And on top of significantly delaying your divorce, it will restrict you from retaining a lot of your property.
For more guidance, you can feel confident by turning to a skilled Rockland County bankruptcy attorney. Give our firm a call at your earliest possible convenience. We look forward to hearing from you.
Contact our experienced New York firm
If you require the services of an experienced Business Law or Bankruptcy attorney, contact the Law Offices of Allen A. Kolber, Esq. today to schedule a consultation and discuss your options.