Bankruptcy and Divorce....What To File First?
Many people cite divorce as a leading reason for their bankruptcy filing. However, planning ahead can make both your bankruptcy and your divorce less complicated and more cost effective. Whether you should file a bankruptcy before or after a divorce depends on how much property and debt you have, and what type of bankruptcy you wish to file.
Read on to learn more about what to consider when deciding which you should file first: bankruptcy or divorce.
Bankruptcy and Divorce Costs
Bankruptcy filing fees are the same for joint and individual filings. So filing a joint bankruptcy with your spouse before a divorce can save you a lot on court fees. Also, if you decide to hire a bankruptcy attorney, your attorney fees will likely be much lower for a joint bankruptcy than if each of you filed separately. However, you should let your bankruptcy attorney know about your upcoming divorce as there may be a conflict of interest for him or her to represent you both.
Chapter 7 vs. Chapter 13 Bankruptcy
A Chapter 7 is a liquidation bankruptcy designed to get rid of your unsecured debts such as credit card debt and medical bills. In a Chapter 7, you usually receive a discharge after only a few months. So it can be completed quickly before a divorce.
In contrast, a Chapter 13 bankruptcy lasts three to five years because you have to pay back some or all of your debts through a repayment plan. So if you were looking to file a Chapter 13, it may be a better idea to file individually after the divorce because it takes a long time to complete.
Whether you are going through a divorce, bankruptcy, or both please let an experienced attorney help you through this rough time.
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