For some couples, and this may be you, divorce and bankruptcy come hand-in-hand. This shouldn't be surprising since some of the leading causes of divorce today are related to money in some form or fashion. Plus, half of all marriages end in divorce, according to statistics. If you and your spouse have decided to end your marriage, yet you also need to file bankruptcy, which one should be filed first or does it matter which order you file? Read on to learn more.
Debt Accumulated in a Marriage
When a person wants to file bankruptcy, it is because they have piled up so much debt that there is no light at the end of the tunnel. They do not see a way to repay the debt. In community property states, couples are responsible for marriage
Benefits of Filing Bankruptcy First
The primary reasons that you want to consider filing for bankruptcy first include filing costs, attorney fees and potential exemptions.
Costs for Filing – The fee remains the same to file
bankruptcy whetheryou are married or single. If you are both planning to file bankruptcy, then you can both save a decent chunk of change by filing together before dissolving your marriage.
Fees for the Attorney – At the same time, hiring a single attorney to handle your joint bankruptcy will be much less costly than if you both hired a lawyer and filed two separate bankruptcies. Just make sure that the attorney knows that you plan on getting a divorce after you file so that conflicts of interest are eliminated from the start.
Possible Exemptions – In bankruptcy proceedings, there are certain exemptions that may allow you to protect some of your owned property from being liquidated. In some states, if you're married, you may be able to double those exemptions. So, if you have a large amount of property, filing a joint bankruptcy may help you protect more of it.
Benefits of Filing for Divorce First
If you and your spouse both have high salaries, then filing for divorce first may be the wiser option. This is because your income must be below a certain level in order to file for Chapter 7 bankruptcy at all. When you file as a married couple, both of your incomes are used in order to determine if you qualify to file. If it is too high, then you may be able to become eligible based on your own separate income. If that's the case, then you will want to wait until after the
If you need assistance in filing for divorce or bankruptcy, contact an experienced attorney who specializes in the field that you are seeking assistance in. More than likely, one attorney will not be well-versed in both of these areas of the law. To find out more, speak with someone like Ward & Ketchersid PA.