If you and your spouse can be amicable and work together on a joint bankruptcy filing, it can be beneficial for both of you. There are many benefits for a married couple who are contemplating both divorce and bankruptcy to file a joint bankruptcy prior to filing for divorce. This option should only be considered when it is appropriate to wait for a divorce filing. Depending on your circumstances, filing a joint bankruptcy petition with your spouse before a divorce can help to ensure your financial welfare going forward. These are some of the reasons why you may want to file for bankruptcy before filing for divorce.
1. Filing A Joint Case Can Save You Money
A couple who files jointly before the divorce saves money because the spouses can file one bankruptcy petition instead of two. This is called a joint case. There will be one court filing fee, one set of documents and schedules, one meeting of creditors, and usually one attorney’s fee. Even if the legal fee when filing jointly is higher than if one spouse files, the total fee is usually less than if each spouse files separately.
2. Filing Bankruptcy Can Eliminate Liability on Joint Debt
A couple who files jointly prior to divorce can eliminate the marital debt and simplify the property division in a divorce. This might lower your divorce costs as a result. By eliminating the majority of your debt, there is less to fight over in your divorce case. This can be especially helpful if you have had significant debt problems. Additionally, if debt is eliminated there will be more money to live on now that one household is being split into two. Conversely, if a divorce is filed before a bankruptcy, then you and your spouse will need to split up the joint debt. This can be time consuming and lead to more strife and legal fees in the divorce.
3. Filing Jointly Increases Exemption Amounts
When you file a bankruptcy case, you are allowed to keep some property with which to get a Fresh Start. These are called exemptions. Exemption amounts are capped at a particular dollar amount. If you file a bankruptcy case with your spouse, you will each be able to claim a full set of exemptions thereby usually keeping more property.
4. Filing Jointly Saves Time
Typically, jointly filing for bankruptcy before filing for a divorce can save you time in both the bankruptcy and divorce case. The bankruptcy will help to eliminate the parties’ debt and therefore resolve the issues of debt in the divorce. Also, if you file for a divorce first, and then, in the middle of the divorce, the other spouse files for bankruptcy, the divorce proceedings will be delayed.
5. Filing Jointly Helps in the Divorce
In a divorce, the assets and the debt must be allocated and resolved. By first filing for bankruptcy, you will eliminate most, if not all, of your credit card debts, personal loans and other unsecured debt. This will help resolve these issues in the divorce.
Call Us Now to Discuss if Bankruptcy Would Benefit You
If you are contemplating both divorce and bankruptcy call our experienced lawyers at Levitt & Slafkes, P.C. to help you decide the best timing of your bankruptcy. 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.
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