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Should You File for Bankruptcy Before Divorce?

Created: On April 9, 2009 @ 5:12 pm In

It’s bad enough to have to go through a divorce, but having to also deal with a [1] bankruptcy can be a nightmare. So if you’re having marital issues and think you’re headed into bankruptcy, which should you address first? Some financial experts say it makes sense to file for bankruptcy before a divorce. Here’s why:

  • If you have already filed for divorce, a [2] bankruptcy filing may put your divorce on hold until the bankruptcy is settled.
  • Filing a joint bankruptcy can allow both of you wipe out certain debts. But if your spouse files for bankruptcy after divorce proceedings begin, you could end up liable for the full amount of joint debts.
  • Filing a joint bankruptcy will be cheaper than filing separately after a divorce.
  • Getting rid of as much debt as possible in a bankruptcy can help make it easier to divide any remaining debts and property during a divorce. A bankruptcy court must declare a property as exempt, or not available for liquidation to pay debts, before a divorce court can decide how to divide it.

Try to get [3] help with your debt from a credit counselor before resorting to bankruptcy or divorce. Financial and marital problems are often closely related, so for some couples, getting [4] help with debts can keep the situation from escalating to the point where they’re meeting up before a judge. Besides, federal law requires debt counseling before a bankruptcy can be filed to discharge debts, so you may as well get some help. 

Also, since the laws on bankruptcy and divorce can vary from state to state, it’s important to find attorneys and credit counselors who have the knowledge to assist you with your specific situation.

About the Author:

Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.

Article printed from DebtHelp.com Blog: http://www.debthelp.com/blog

URL to article: http://www.debthelp.com/blog/2009/04/09/should-you-file-for-bankruptcy-before-divorce/

URLs in this post:
[1] bankruptcy: http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/process.html
[2] bankruptcy: http://www.wife.org/ss.divorce-bankruptcy.htm
[3] help with your debt : http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre26.shtm
[4] help with debts : http://www.concordmonitor.com/apps/pbcs.dll/article?AID=/20090405/FRONTPAGE/904050310