Menu
Call us Today to Set Up
A Free Case Evaluation
Search
Call us Today to Set Up A
Free Case Evaluation
${site.data.firmName}${SEMFirmNameAlt}
Take Control of Your Financial Future
${site.data.firmName}${SEMFirmNameAlt}
Get The Fresh Start You Deserve
973-323-2953
Se Habla EspaƑol
Contact Us
View Our Practice Areas

5 FACTORS TO CONSIDER IN DECIDING WHETHER TO FILE BANKRUPTCY BEFORE DIVORCE

5 FACTORS TO CONSIDER IN DECIDING WHETHER TO FILE BANKRUPTCY BEFORE DIVORCE Bankruptcy and divorce are two of life's most upsetting challenges and are often intertwined.  Financial stress may be a factor in the decision to get divorced.  Divorce itself may cause financial stress.  We are often asked by people headed for both bankruptcy and divorce which should come first?  Read on to learn more about what to consider when deciding which you should file first: bankruptcy or divorce?

 

1. Bankruptcy Type-  Do You Want to File Chapter 7 or Chapter 13?

        A main factor in deciding whether to file bankruptcy before or after divorce is the type of bankruptcy you want to file.  If your bankruptcy is a Chapter 7 bankruptcy, then filing before the divorce may be the best option.  Since the Chapter 7 bankruptcy can be filed and completed in three to six months, it might be possible to wait until the bankruptcy is complete to file for divorce.

       A Chapter 13 bankruptcy involves a repayment plan which lasts from three to five years.  This lengthy period before the bankruptcy is over makes it unrealistic for most couples to complete a Chapter 13 bankruptcy before getting divorced.  If you filed a joint bankruptcy with your spouse and file for divorce during the bankruptcy you will need to go through the process of having the bankruptcy case separated or closed once you officially end the marriage.

2. Household Income

      Your household income is another factor to consider when deciding whether to file before or after the divorce. In order to qualify for Chapter 7 bankruptcy, you must take and pass the "means test." If your income is too high, you will be required to file Chapter 13 instead.

      It is possible that your income while married may be too high to qualify for Chapter 7 as the income of both spouses is generally considered. You might become eligible to file Chapter 7 once you are legally separated or divorced and relying solely on your income. In that case, you may want to wait to file bankruptcy.

3. Protection of Property

     It is important to work with a bankruptcy attorney to determine how your assets will be protected if you file a joint bankruptcy with your spouse.  This is particularly important if you jointly own property such as a house and a car.  Filing a joint bankruptcy could provide you with additional exemptions (the amount the law allows you to keep).

4. Bankruptcy and Divorce Costs

      If you file a joint bankruptcy, the overall cost will be lower than if you file two separate bankruptcies after you divorce.  The filing fees are the same whether one or both spouses file.  Currently the filing fees for a Chapter 7 bankruptcy is $335.00 and for a Chapter 13 bankruptcy is $310.00.   Further, paying an attorney to file one joint bankruptcy will be considerably cheaper than if each spouse hires a separate lawyer and files a separate bankruptcy.

     Filing for bankruptcy before a divorce can also simplify the issues regarding debt and property division and likely lower your divorce costs as a result.

5. Relationship Status

     If you are on amicable terms with your spouse, then filing a joint bankruptcy before a divorce could be a viable option.  However, attempting to file bankruptcy with a spouse who is hostile to your financial interest or who you think is hiding assets could be detrimental.

Contact Us for Help Regarding Bankruptcy & Divorce

Deciding how to proceed when bankruptcy and divorce collide can be complex and overwhelming.  Feel free to contact the experienced bankruptcy attorneys at Levitt & Slafkes, P.C. to discuss the best way to move forward.
We are here to help.  Call us at 973-323-2953, or contact us online to schedule a free consultation.

We are proudly designated as a debt relief agency by an act of Congress. We have proudly assisted consumers in filing for Bankruptcy relief for over 30 years.

We've also created a Free E-book, Bankruptcy and Divorce... Which Should Come First? Please feel free to download your copy here https://gt125-27d2a4.pages.infusionsoft.net/

No Comments

Leave a comment
Comment Information

Our bankruptcy attorneys will help you escape debt and
face the future with optimism.

Email Us For A Response

Begin Your New
Financial Life
Today

Office Location

Levitt & Slafkes, P.C.
515 Valley Street
Suite 140
Maplewood, NJ 07040

Phone: 973-323-2953
Fax: 973-313-1240
Map & Directions

google map