Often times filing for divorce and filing for bankruptcy go hand in hand. Many people considering divorce wonder if it is better to file for bankruptcy before or after the divorce proceeding. A couple on the verge of divorce should consider jointly filing for bankruptcy divorcing, if both indivudals are in need of a bankruptcy. However, keep in mind that a bankruptcy may take a longer time to settle than a divorce proceedure.
A couple jointly filing for bankruptcy is advantageous if you and your spouse have a large amount of joint debt, because filing together will minimize your debt and ease the divorce proceedings. Also, there will only be one filing fee and one attorney fee for the joint case.
A joint bankruptcy may help with qualifying for a chapter 7 because it allows the couple to use their joint household size. If the couple filed separately, they may not qualify for a chapter 7 because their disposable income as individuals may be more and could possibly disqualify them from a chapter 7.
If a couple choses to file for chapter 13 they must be ready to commit to a 3-5 year payment plan. Chapter 13 is not recommended for a couple that wants to file a divorce soon, or just can't stand each other. If that is the case, it is recommended you file for bankruptcy after getting divorced.
Note that filing for bankruptcy does not discharge one from paying child support, alimony or impacts your property settlement.
The best way to make sure you are making the right choice is to consult a bankruptcy attorney and ask questions that pertain to your situation. For your free initial consultation, please call an Orange County Bankruptcy Attorney at
1st California Law Inc.