Ending a marriage has a substantial impact on each spouse’s finances, and there are many times when bankruptcy becomes a necessary option.
It is important to get the timing right when filing for both divorce and bankruptcy.
What should you consider?
Divorce is difficult emotionally and financially. For couples that are already struggling with debt, the added cost of legal fees can be overwhelming. Delaware law states that debts incurred during the marriage are subject to equitable distribution in a divorce. That means that either spouse could be responsible for repaying on the marital debt, regardless of whether the debt is in joint name or solely in one spouses name.
Because of the effect they have on each other, it is best to avoid simultaneous filing, which can lead to delays and confusion.
When is the best time to file?
Depending on the type of bankruptcy you intend on filing, taking this step before a divorce can be beneficial in a number of ways. For those wishing to file Chapter 7, prioritizing this process may be a good idea. This allows you to share the fees with your spouse. It also makes equitable division of marital debt simpler once divorce proceedings take place.
However, there are situations, such as Chapter 13 bankruptcy, in which finalizing your divorce first would be more beneficial. It will be helpful for you to explore both Chapter 7 and Chapter 13 bankruptcy information before filing for divorce, in order to decide which is the feasible option for you.
Understanding the requirements and how each alternative affects you can save you money, stress and time.